Correlation Between Dominos Pizza and Sharplink Gaming

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

By analyzing existing cross correlation between Dominos Pizza Common and Sharplink Gaming, you can compare the effects of market volatilities on Dominos Pizza and Sharplink Gaming 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 Dominos Pizza with a short position of Sharplink Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dominos Pizza and Sharplink Gaming.

Diversification Opportunities for Dominos Pizza and Sharplink Gaming

-0.43

Correlation Coefficient

Dominos Pizza  Sharplink Gaming

Very good diversification

The 3 months correlation between Dominos and Sharplink is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Dominos Pizza Common and Sharplink Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sharplink Gaming and Dominos Pizza 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 Dominos Pizza Common are associated (or correlated) with Sharplink Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sharplink Gaming has no effect on the direction of Dominos Pizza i.e., Dominos Pizza and Sharplink Gaming go up and down completely randomly.

Pair Corralation between Dominos Pizza and Sharplink Gaming

Considering the 90-day investment horizon Dominos Pizza Common is expected to generate 0.32 times more return on investment than Sharplink Gaming. However, Dominos Pizza Common is 3.1 times less risky than Sharplink Gaming. It trades about 0.0 of its potential returns per unit of risk. Sharplink Gaming is currently generating about -0.16 per unit of risk. If you would invest  43,824  in Dominos Pizza Common on January 7, 2025 and sell it today you would lose (330.00) from holding Dominos Pizza Common or give up 0.75% of portfolio value over 90 days.

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

Dominos Pizza Common  vs.  Sharplink Gaming

Dominos Pizza Common

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dominos Pizza Common are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Dominos Pizza may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Sharplink Gaming

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sharplink Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Dominos Pizza and Sharplink Gaming

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

The idea behind Dominos Pizza Common and Sharplink Gaming 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.