Correlation Between Vivendi SA and Home Depot
Can any of the company-specific risk be diversified away by investing in both Vivendi SA 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 Vivendi SA and Home Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vivendi SA and Home Depot, you can compare the effects of market volatilities on Vivendi SA 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 Vivendi SA with a short position of Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vivendi SA and Home Depot.
Diversification Opportunities for Vivendi SA and Home Depot
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vivendi and Home is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Vivendi SA and Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot and Vivendi SA 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 Vivendi SA 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 Vivendi SA i.e., Vivendi SA and Home Depot go up and down completely randomly.
Pair Corralation between Vivendi SA and Home Depot
If you would invest 257.00 in Vivendi SA on October 10, 2024 and sell it today you would lose (1.00) from holding Vivendi SA or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vivendi SA vs. Home Depot
Performance |
| Timeline |
| Vivendi SA |
| Home Depot |
Vivendi SA and Home Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vivendi SA and Home Depot
The main advantage of trading using opposite Vivendi SA and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vivendi SA 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.| Vivendi SA vs. Sabre Insurance Group | Vivendi SA vs. Polar Capital Technology | Vivendi SA vs. Sabien Technology Group | Vivendi SA vs. Spotify Technology SA |
| Home Depot vs. Diversified Energy | Home Depot vs. Norwegian Air Shuttle | Home Depot vs. Air Products Chemicals | Home Depot vs. Caledonia Investments |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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