Correlation Between Home Depot and Jupiter Fund
Can any of the company-specific risk be diversified away by investing in both Home Depot and Jupiter Fund 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 Jupiter Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Jupiter Fund Management, you can compare the effects of market volatilities on Home Depot and Jupiter Fund 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 Jupiter Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Jupiter Fund.
Diversification Opportunities for Home Depot and Jupiter Fund
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Home and Jupiter is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Jupiter Fund Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jupiter Fund Management 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 Jupiter Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jupiter Fund Management has no effect on the direction of Home Depot i.e., Home Depot and Jupiter Fund go up and down completely randomly.
Pair Corralation between Home Depot and Jupiter Fund
Assuming the 90 days trading horizon Home Depot is expected to generate 0.1 times more return on investment than Jupiter Fund. However, Home Depot is 10.46 times less risky than Jupiter Fund. It trades about 0.09 of its potential returns per unit of risk. Jupiter Fund Management is currently generating about -0.01 per unit of risk. If you would invest 16,193 in Home Depot on September 13, 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 Together |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Home Depot vs. Jupiter Fund Management
Performance |
| Timeline |
| Home Depot |
| Jupiter Fund Management |
Home Depot and Jupiter Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Jupiter Fund
The main advantage of trading using opposite Home Depot and Jupiter Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Jupiter Fund 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 Jupiter Fund will offset losses from the drop in Jupiter Fund's long position.| Home Depot vs. Rightmove PLC | Home Depot vs. Bioventix | Home Depot vs. VeriSign | Home Depot vs. Games Workshop Group |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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