Correlation Between Home Depot and X FAB
Can any of the company-specific risk be diversified away by investing in both Home Depot and X FAB 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 X FAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and X FAB Silicon Foundries, you can compare the effects of market volatilities on Home Depot and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and X FAB.
Diversification Opportunities for Home Depot and X FAB
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Home and 0ROZ is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of Home Depot i.e., Home Depot and X FAB go up and down completely randomly.
Pair Corralation between Home Depot and X FAB
If you would invest 489.00 in X FAB Silicon Foundries on November 28, 2024 and sell it today you would earn a total of 12.00 from holding X FAB Silicon Foundries or generate 2.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Depot vs. X FAB Silicon Foundries
Performance |
| Timeline |
| Home Depot |
| X FAB Silicon |
Home Depot and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and X FAB
The main advantage of trading using opposite Home Depot and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.| Home Depot vs. Jade Road Investments | Home Depot vs. Tatton Asset Management | Home Depot vs. Mobius Investment Trust | Home Depot vs. Litigation Capital Management |
| X FAB vs. BlackRock Frontiers Investment | X FAB vs. Mobius Investment Trust | X FAB vs. Lindsell Train Investment | X FAB vs. Livermore Investments Group |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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