Correlation Between Home Depot and Vienna Insurance
Can any of the company-specific risk be diversified away by investing in both Home Depot and Vienna Insurance 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 Vienna Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Vienna Insurance Group, you can compare the effects of market volatilities on Home Depot and Vienna Insurance 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 Vienna Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Vienna Insurance.
Diversification Opportunities for Home Depot and Vienna Insurance
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Home and Vienna is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance 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 Vienna Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vienna Insurance has no effect on the direction of Home Depot i.e., Home Depot and Vienna Insurance go up and down completely randomly.
Pair Corralation between Home Depot and Vienna Insurance
Assuming the 90 days trading horizon Home Depot is expected to generate 0.17 times more return on investment than Vienna Insurance. However, Home Depot is 5.78 times less risky than Vienna Insurance. It trades about 0.15 of its potential returns per unit of risk. Vienna Insurance Group is currently generating about -0.04 per unit of risk. If you would invest 17,632 in Home Depot on August 30, 2024 and sell it today you would earn a total of 225.00 from holding Home Depot or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Depot vs. Vienna Insurance Group
Performance |
| Timeline |
| Home Depot |
| Vienna Insurance |
Home Depot and Vienna Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Vienna Insurance
The main advantage of trading using opposite Home Depot and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Vienna Insurance 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 Vienna Insurance will offset losses from the drop in Vienna Insurance's long position.| Home Depot vs. Tlou Energy | Home Depot vs. Rockfire Resources plc | Home Depot vs. Ikigai Ventures | Home Depot vs. Helium One Global |
| Vienna Insurance vs. Litigation Capital Management | Vienna Insurance vs. Tatton Asset Management | Vienna Insurance vs. Check Point Software | Vienna Insurance vs. Home Depot |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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