Correlation Between Domo and Vitania
Can any of the company-specific risk be diversified away by investing in both Domo and Vitania at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Domo and Vitania into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Domo Inc and Vitania, you can compare the effects of market volatilities on Domo and Vitania and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Domo with a short position of Vitania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Domo and Vitania.
Diversification Opportunities for Domo and Vitania
Good diversification
The 3 months correlation between Domo and Vitania is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Domo Inc and Vitania in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitania and Domo is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Domo Inc are associated (or correlated) with Vitania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitania has no effect on the direction of Domo i.e., Domo and Vitania go up and down completely randomly.
Pair Corralation between Domo and Vitania
Given the investment horizon of 90 days Domo Inc is expected to under-perform the Vitania. But the stock apears to be less risky and, when comparing its historical volatility, Domo Inc is 1.88 times less risky than Vitania. The stock trades about -0.5 of its potential returns per unit of risk. The Vitania is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 202,674 in Vitania on January 26, 2024 and sell it today you would lose (9,174) from holding Vitania or give up 4.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 76.19% |
| Values | Daily Returns |
Domo Inc vs. Vitania
Performance |
| Timeline |
| Domo Inc |
| Vitania |
Domo and Vitania Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Domo and Vitania
The main advantage of trading using opposite Domo and Vitania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Domo position performs unexpectedly, Vitania can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Vitania will offset losses from the drop in Vitania's long position.The idea behind Domo Inc and Vitania pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |