Correlation Between MR BRICOLAGE and Home Depot
Can any of the company-specific risk be diversified away by investing in both MR BRICOLAGE and Home Depot 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 MR BRICOLAGE and Home Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MR BRICOLAGE INH and The Home Depot, you can compare the effects of market volatilities on MR BRICOLAGE and Home Depot 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 MR BRICOLAGE with a short position of Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of MR BRICOLAGE and Home Depot.
Diversification Opportunities for MR BRICOLAGE and Home Depot
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 4OL and Home is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding MR BRICOLAGE INH and The Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot and MR BRICOLAGE 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 MR BRICOLAGE INH are associated (or correlated) with Home Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Depot has no effect on the direction of MR BRICOLAGE i.e., MR BRICOLAGE and Home Depot go up and down completely randomly.
Pair Corralation between MR BRICOLAGE and Home Depot
Assuming the 90 days horizon MR BRICOLAGE INH is expected to under-perform the Home Depot. But the stock apears to be less risky and, when comparing its historical volatility, MR BRICOLAGE INH is 1.41 times less risky than Home Depot. The stock trades about -0.11 of its potential returns per unit of risk. The The Home Depot is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 30,326 in The Home Depot on August 29, 2024 and sell it today you would earn a total of 10,194 from holding The Home Depot or generate 33.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MR BRICOLAGE INH vs. The Home Depot
Performance |
| Timeline |
| MR BRICOLAGE INH |
| Home Depot |
MR BRICOLAGE and Home Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MR BRICOLAGE and Home Depot
The main advantage of trading using opposite MR BRICOLAGE and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MR BRICOLAGE position performs unexpectedly, Home Depot 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 Home Depot will offset losses from the drop in Home Depot's long position.| MR BRICOLAGE vs. Superior Plus Corp | MR BRICOLAGE vs. NMI Holdings | MR BRICOLAGE vs. Origin Agritech | MR BRICOLAGE vs. SIVERS SEMICONDUCTORS AB |
| Home Depot vs. Superior Plus Corp | Home Depot vs. NMI Holdings | Home Depot vs. Origin Agritech | Home Depot vs. SIVERS SEMICONDUCTORS AB |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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