Correlation Between Home Depot and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both Home Depot and GreenX 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 GreenX 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 GreenX Metals, you can compare the effects of market volatilities on Home Depot and GreenX 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 GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and GreenX Metals.
Diversification Opportunities for Home Depot and GreenX Metals
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Home and GreenX is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals 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 GreenX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenX Metals has no effect on the direction of Home Depot i.e., Home Depot and GreenX Metals go up and down completely randomly.
Pair Corralation between Home Depot and GreenX Metals
If you would invest 3,420 in GreenX Metals on October 12, 2024 and sell it today you would earn a total of 230.00 from holding GreenX Metals or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Depot vs. GreenX Metals
Performance |
| Timeline |
| Home Depot |
| GreenX Metals |
Home Depot and GreenX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and GreenX Metals
The main advantage of trading using opposite Home Depot and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, GreenX 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 GreenX Metals will offset losses from the drop in GreenX Metals' long position.| Home Depot vs. Alien Metals | Home Depot vs. Wyndham Hotels Resorts | Home Depot vs. European Metals Holdings | Home Depot vs. URU Metals |
| GreenX Metals vs. Cairn Homes PLC | GreenX Metals vs. Software Circle plc | GreenX Metals vs. Polar Capital Technology | GreenX Metals 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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