Correlation Between Mitek Systems and Domo
Can any of the company-specific risk be diversified away by investing in both Mitek Systems and Domo 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 Mitek Systems and Domo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitek Systems and Domo Inc, you can compare the effects of market volatilities on Mitek Systems and Domo 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 Mitek Systems with a short position of Domo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitek Systems and Domo.
Diversification Opportunities for Mitek Systems and Domo
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mitek and Domo is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Mitek Systems and Domo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Domo Inc and Mitek Systems 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 Mitek Systems are associated (or correlated) with Domo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Domo Inc has no effect on the direction of Mitek Systems i.e., Mitek Systems and Domo go up and down completely randomly.
Pair Corralation between Mitek Systems and Domo
Given the investment horizon of 90 days Mitek Systems is expected to under-perform the Domo. In addition to that, Mitek Systems is 1.26 times more volatile than Domo Inc. It trades about -0.07 of its total potential returns per unit of risk. Domo Inc is currently generating about 0.04 per unit of volatility. If you would invest 677.00 in Domo Inc on June 21, 2024 and sell it today you would earn a total of 27.00 from holding Domo Inc or generate 3.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.41% |
Values | Daily Returns |
Mitek Systems vs. Domo Inc
Performance |
Timeline |
Mitek Systems |
Domo Inc |
Mitek Systems and Domo Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mitek Systems and Domo
The main advantage of trading using opposite Mitek Systems and Domo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitek Systems position performs unexpectedly, Domo 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 Domo will offset losses from the drop in Domo's long position.Mitek Systems vs. C3 Ai Inc | Mitek Systems vs. Shopify | Mitek Systems vs. Snowflake | Mitek Systems vs. ServiceNow |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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