Correlation Between Domo and Amphenol

Can any of the company-specific risk be diversified away by investing in both Domo and Amphenol 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 Amphenol into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Domo Inc and Amphenol, you can compare the effects of market volatilities on Domo and Amphenol 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 Amphenol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Domo and Amphenol.

Diversification Opportunities for Domo and Amphenol

-0.82

Correlation Coefficient

Domo  Amphenol

Pay attention - limited upside

The 3 months correlation between Domo and Amphenol is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Domo Inc and Amphenol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amphenol 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 Amphenol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amphenol has no effect on the direction of Domo i.e., Domo and Amphenol go up and down completely randomly.

Pair Corralation between Domo and Amphenol

Given the investment horizon of 90 days Domo Inc is expected to under-perform the Amphenol. In addition to that, Domo is 3.42 times more volatile than Amphenol. It trades about -0.06 of its total potential returns per unit of risk. Amphenol is currently generating about 0.21 per unit of volatility. If you would invest  3,995  in Amphenol on March 21, 2024 and sell it today you would earn a total of  2,978  from holding Amphenol or generate 74.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Domo Inc  vs.  Amphenol

Domo Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Domo Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in July 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Amphenol

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amphenol are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting basic indicators, Amphenol demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Domo and Amphenol

The main advantage of trading using opposite Domo and Amphenol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Domo position performs unexpectedly, Amphenol 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 Amphenol will offset losses from the drop in Amphenol's long position.

The idea behind Domo Inc and Amphenol 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.