Correlation Between Home Depot and Fulcrum Metals
Can any of the company-specific risk be diversified away by investing in both Home Depot and Fulcrum Metals 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 Fulcrum Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Fulcrum Metals PLC, you can compare the effects of market volatilities on Home Depot and Fulcrum Metals 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 Fulcrum Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Fulcrum Metals.
Diversification Opportunities for Home Depot and Fulcrum Metals
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Home and Fulcrum is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Fulcrum Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulcrum Metals 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 Fulcrum Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulcrum Metals PLC has no effect on the direction of Home Depot i.e., Home Depot and Fulcrum Metals go up and down completely randomly.
Pair Corralation between Home Depot and Fulcrum Metals
Assuming the 90 days trading horizon Home Depot is expected to generate 0.11 times more return on investment than Fulcrum Metals. However, Home Depot is 8.72 times less risky than Fulcrum Metals. It trades about 0.09 of its potential returns per unit of risk. Fulcrum Metals PLC is currently generating about -0.09 per unit of risk. If you would invest 16,193 in Home Depot on September 2, 2024 and sell it today you would earn a total of 1,664 from holding Home Depot or generate 10.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.87% |
| Values | Daily Returns |
Home Depot vs. Fulcrum Metals PLC
Performance |
| Timeline |
| Home Depot |
| Fulcrum Metals PLC |
Home Depot and Fulcrum Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Fulcrum Metals
The main advantage of trading using opposite Home Depot and Fulcrum Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Fulcrum Metals 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 Fulcrum Metals will offset losses from the drop in Fulcrum Metals' long position.| Home Depot vs. Livermore Investments Group | Home Depot vs. Extra Space Storage | Home Depot vs. TR Property Investment | Home Depot vs. Axway Software SA |
| Fulcrum Metals vs. Sparebank 1 SR | Fulcrum Metals vs. Synchrony Financial | Fulcrum Metals vs. MT Bank Corp | Fulcrum Metals vs. The Mercantile Investment |
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 CEOs Directory module to screen CEOs from public companies around the world.
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