Correlation Between Home Depot and Technicolor
Can any of the company-specific risk be diversified away by investing in both Home Depot and Technicolor 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 Technicolor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Technicolor, you can compare the effects of market volatilities on Home Depot and Technicolor 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 Technicolor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Technicolor.
Diversification Opportunities for Home Depot and Technicolor
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Home and Technicolor is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Technicolor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technicolor 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 Technicolor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technicolor has no effect on the direction of Home Depot i.e., Home Depot and Technicolor go up and down completely randomly.
Pair Corralation between Home Depot and Technicolor
If you would invest 17,857 in Home Depot on October 23, 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 | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Home Depot vs. Technicolor
Performance |
| Timeline |
| Home Depot |
| Technicolor |
Home Depot and Technicolor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Technicolor
The main advantage of trading using opposite Home Depot and Technicolor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Technicolor 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 Technicolor will offset losses from the drop in Technicolor's long position.| Home Depot vs. Vitec Software Group | Home Depot vs. Gaming Realms plc | Home Depot vs. Alfa Financial Software | Home Depot vs. Ashtead Technology Holdings |
| Technicolor vs. Home Depot | Technicolor vs. Weiss Korea Opportunity | Technicolor vs. River and Mercantile | Technicolor vs. Chrysalis Investments |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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