Correlation Between Signet Jewelers and Dogness International

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

By analyzing existing cross correlation between Signet Jewelers and Dogness International Corp, you can compare the effects of market volatilities on Signet Jewelers and Dogness International 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 Signet Jewelers with a short position of Dogness International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Signet Jewelers and Dogness International.

Diversification Opportunities for Signet Jewelers and Dogness International

-0.1

Correlation Coefficient

Signet Jewelers  Dogness International

Good diversification

The 3 months correlation between Signet and Dogness is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Signet Jewelers and Dogness International Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dogness International and Signet Jewelers 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 Signet Jewelers are associated (or correlated) with Dogness International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dogness International has no effect on the direction of Signet Jewelers i.e., Signet Jewelers and Dogness International go up and down completely randomly.

Pair Corralation between Signet Jewelers and Dogness International

Considering the 90-day investment horizon Signet Jewelers is expected to under-perform the Dogness International. But the stock apears to be less risky and, when comparing its historical volatility, Signet Jewelers is 3.69 times less risky than Dogness International. The stock trades about -0.03 of its potential returns per unit of risk. The Dogness International Corp is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  635.00  in Dogness International Corp on February 21, 2024 and sell it today you would earn a total of  187.00  from holding Dogness International Corp or generate 29.45% return on investment over 90 days.

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

Signet Jewelers  vs.  Dogness International Corp

Signet Jewelers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Signet Jewelers has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Signet Jewelers is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Dogness International

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dogness International Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Dogness International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Signet Jewelers and Dogness International

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

The idea behind Signet Jewelers and Dogness International Corp 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 Transaction History module to view history of all your transactions and understand their impact on performance.