Correlation Between Fiesta Restaurant and Dominos Pizza

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Fiesta Restaurant and Dominos Pizza 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 Fiesta Restaurant and Dominos Pizza into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fiesta Restaurant Group and Dominos Pizza, you can compare the effects of market volatilities on Fiesta Restaurant and Dominos Pizza 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 Fiesta Restaurant with a short position of Dominos Pizza. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiesta Restaurant and Dominos Pizza.

Diversification Opportunities for Fiesta Restaurant and Dominos Pizza

0.49
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Fiesta and Dominos is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Fiesta Restaurant Group and Dominos Pizza in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominos Pizza and Fiesta Restaurant 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 Fiesta Restaurant Group are associated (or correlated) with Dominos Pizza. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominos Pizza has no effect on the direction of Fiesta Restaurant i.e., Fiesta Restaurant and Dominos Pizza go up and down completely randomly.

Pair Corralation between Fiesta Restaurant and Dominos Pizza

If you would invest  50,586  in Dominos Pizza on February 3, 2024 and sell it today you would earn a total of  684.00  from holding Dominos Pizza or generate 1.35% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy4.55%
ValuesDaily Returns

Fiesta Restaurant Group  vs.  Dominos Pizza

 Performance 
       Timeline  
Fiesta Restaurant 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Fiesta Restaurant Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Fiesta Restaurant is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.
Dominos Pizza 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Dominos Pizza are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Dominos Pizza showed solid returns over the last few months and may actually be approaching a breakup point.

Fiesta Restaurant and Dominos Pizza Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fiesta Restaurant and Dominos Pizza

The main advantage of trading using opposite Fiesta Restaurant and Dominos Pizza positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiesta Restaurant position performs unexpectedly, Dominos Pizza 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 Dominos Pizza will offset losses from the drop in Dominos Pizza's long position.
The idea behind Fiesta Restaurant Group and Dominos Pizza 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

Other Complementary Tools

Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities
Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites