Correlation Between Home Depot and Erste Group
Can any of the company-specific risk be diversified away by investing in both Home Depot and Erste Group 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 Home Depot and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Erste Group Bank, you can compare the effects of market volatilities on Home Depot and Erste Group 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 Home Depot with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Erste Group.
Diversification Opportunities for Home Depot and Erste Group
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Home and Erste is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Erste Group Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erste Group Bank and Home Depot 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 Home Depot are associated (or correlated) with Erste Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erste Group Bank has no effect on the direction of Home Depot i.e., Home Depot and Erste Group go up and down completely randomly.
Pair Corralation between Home Depot and Erste Group
If you would invest 5,463 in Erste Group Bank on October 9, 2024 and sell it today you would earn a total of 370.00 from holding Erste Group Bank or generate 6.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Depot vs. Erste Group Bank
Performance |
| Timeline |
| Home Depot |
| Erste Group Bank |
Home Depot and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Erste Group
The main advantage of trading using opposite Home Depot and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Erste Group 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 Erste Group will offset losses from the drop in Erste Group's long position.| Home Depot vs. Jacquet Metal Service | Home Depot vs. Wheaton Precious Metals | Home Depot vs. Bisichi Mining PLC | Home Depot vs. Abingdon Health Plc |
| Erste Group vs. Walmart | Erste Group vs. BYD Co | Erste Group vs. Volkswagen AG | Erste Group vs. Volkswagen AG Non Vtg |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |