Correlation Between Home Depot and CleanTech Lithium
Can any of the company-specific risk be diversified away by investing in both Home Depot and CleanTech Lithium 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 CleanTech Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and CleanTech Lithium plc, you can compare the effects of market volatilities on Home Depot and CleanTech Lithium 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 CleanTech Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and CleanTech Lithium.
Diversification Opportunities for Home Depot and CleanTech Lithium
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Home and CleanTech is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and CleanTech Lithium plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanTech Lithium plc 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 CleanTech Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanTech Lithium plc has no effect on the direction of Home Depot i.e., Home Depot and CleanTech Lithium go up and down completely randomly.
Pair Corralation between Home Depot and CleanTech Lithium
If you would invest 17,857 in Home Depot on October 28, 2024 and sell it today you would earn a total of 0.00 from holding Home Depot or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.56% |
| Values | Daily Returns |
Home Depot vs. CleanTech Lithium plc
Performance |
| Timeline |
| Home Depot |
| CleanTech Lithium plc |
Home Depot and CleanTech Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and CleanTech Lithium
The main advantage of trading using opposite Home Depot and CleanTech Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, CleanTech Lithium 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 CleanTech Lithium will offset losses from the drop in CleanTech Lithium's long position.| Home Depot vs. Creo Medical Group | Home Depot vs. Sovereign Metals | Home Depot vs. European Metals Holdings | Home Depot vs. Jacquet Metal Service |
| CleanTech Lithium vs. TBC Bank Group | CleanTech Lithium vs. Take Two Interactive Software | CleanTech Lithium vs. VPC Specialty Lending | CleanTech Lithium vs. Metro Bank PLC |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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