Correlation Between Domo and Duos Technologies

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

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

Diversification Opportunities for Domo and Duos Technologies

0.46

Correlation Coefficient

Domo  Duos Technologies

Very weak diversification

The 3 months correlation between Domo and Duos is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Domo Inc and Duos Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duos Technologies 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 Duos Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duos Technologies has no effect on the direction of Domo i.e., Domo and Duos Technologies go up and down completely randomly.

Pair Corralation between Domo and Duos Technologies

Given the investment horizon of 90 days Domo Inc is expected to generate 0.44 times more return on investment than Duos Technologies. However, Domo Inc is 2.27 times less risky than Duos Technologies. It trades about -0.47 of its potential returns per unit of risk. Duos Technologies Group is currently generating about -0.53 per unit of risk. If you would invest  907.00  in Domo Inc on January 23, 2024 and sell it today you would lose (137.00) from holding Domo Inc or give up 15.1% of portfolio value over 90 days.

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

Domo Inc  vs.  Duos Technologies Group

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 inconsistent performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in May 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Duos Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Duos Technologies Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Duos Technologies is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Domo and Duos Technologies

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

The idea behind Domo Inc and Duos Technologies Group 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.