Correlation Between Berner Kantonalbank and Home Depot
Can any of the company-specific risk be diversified away by investing in both Berner Kantonalbank 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 Berner Kantonalbank and Home Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berner Kantonalbank AG and Home Depot, you can compare the effects of market volatilities on Berner Kantonalbank 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 Berner Kantonalbank with a short position of Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berner Kantonalbank and Home Depot.
Diversification Opportunities for Berner Kantonalbank and Home Depot
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Berner and Home is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Berner Kantonalbank AG and Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot and Berner Kantonalbank 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 Berner Kantonalbank AG 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 Berner Kantonalbank i.e., Berner Kantonalbank and Home Depot go up and down completely randomly.
Pair Corralation between Berner Kantonalbank and Home Depot
If you would invest 23,500 in Berner Kantonalbank AG on November 7, 2024 and sell it today you would earn a total of 800.00 from holding Berner Kantonalbank AG or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Berner Kantonalbank AG vs. Home Depot
Performance |
| Timeline |
| Berner Kantonalbank |
| Home Depot |
Berner Kantonalbank and Home Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berner Kantonalbank and Home Depot
The main advantage of trading using opposite Berner Kantonalbank and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berner Kantonalbank 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.| Berner Kantonalbank vs. Ashtead Technology Holdings | Berner Kantonalbank vs. Vitec Software Group | Berner Kantonalbank vs. Dentsply Sirona | Berner Kantonalbank vs. Auto Trader Group |
| Home Depot vs. Chocoladefabriken Lindt Spruengli | Home Depot vs. National Atomic Co | Home Depot vs. OTP Bank Nyrt | Home Depot vs. Samsung Electronics Co |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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