Correlation Between Kaufman Et and Home Depot
Can any of the company-specific risk be diversified away by investing in both Kaufman Et and Home Depot 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 Kaufman Et and Home Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaufman Et Broad and Home Depot, you can compare the effects of market volatilities on Kaufman Et and Home Depot 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 Kaufman Et with a short position of Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaufman Et and Home Depot.
Diversification Opportunities for Kaufman Et and Home Depot
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kaufman and Home is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Kaufman Et Broad and Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot and Kaufman Et 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 Kaufman Et Broad are associated (or correlated) with Home Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Depot has no effect on the direction of Kaufman Et i.e., Kaufman Et and Home Depot go up and down completely randomly.
Pair Corralation between Kaufman Et and Home Depot
Assuming the 90 days trading horizon Kaufman Et Broad is expected to generate 6.59 times more return on investment than Home Depot. However, Kaufman Et is 6.59 times more volatile than Home Depot. It trades about 0.05 of its potential returns per unit of risk. Home Depot is currently generating about 0.07 per unit of risk. If you would invest 2,702 in Kaufman Et Broad on November 3, 2024 and sell it today you would earn a total of 606.00 from holding Kaufman Et Broad or generate 22.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Kaufman Et Broad vs. Home Depot
Performance |
| Timeline |
| Kaufman Et Broad |
| Home Depot |
Kaufman Et and Home Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaufman Et and Home Depot
The main advantage of trading using opposite Kaufman Et and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaufman Et position performs unexpectedly, Home Depot 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 Home Depot will offset losses from the drop in Home Depot's long position.| Kaufman Et vs. Seraphim Space Investment | Kaufman Et vs. Take Two Interactive Software | Kaufman Et vs. Check Point Software | Kaufman Et vs. Ashtead Technology Holdings |
| Home Depot vs. Empire Metals Limited | Home Depot vs. BE Semiconductor Industries | Home Depot vs. CAP LEASE AVIATION | Home Depot vs. AMG Advanced Metallurgical |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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