Correlation Between Abingdon Health and Home Depot
Can any of the company-specific risk be diversified away by investing in both Abingdon Health 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 Abingdon Health and Home Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abingdon Health Plc and Home Depot, you can compare the effects of market volatilities on Abingdon Health 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 Abingdon Health with a short position of Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abingdon Health and Home Depot.
Diversification Opportunities for Abingdon Health and Home Depot
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Abingdon and Home is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Abingdon Health Plc and Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot and Abingdon Health 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 Abingdon Health Plc 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 Abingdon Health i.e., Abingdon Health and Home Depot go up and down completely randomly.
Pair Corralation between Abingdon Health and Home Depot
If you would invest 775.00 in Abingdon Health Plc on October 25, 2024 and sell it today you would earn a total of 93.00 from holding Abingdon Health Plc or generate 12.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Abingdon Health Plc vs. Home Depot
Performance |
Timeline |
Abingdon Health Plc |
Home Depot |
Abingdon Health and Home Depot Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Abingdon Health and Home Depot
The main advantage of trading using opposite Abingdon Health and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abingdon Health 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.Abingdon Health vs. HCA Healthcare | Abingdon Health vs. Allianz Technology Trust | Abingdon Health vs. Naturhouse Health SA | Abingdon Health vs. Check Point Software |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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