Correlation Between Bankers Investment and Home Depot
Can any of the company-specific risk be diversified away by investing in both Bankers Investment 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 Bankers Investment and Home Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bankers Investment Trust and Home Depot, you can compare the effects of market volatilities on Bankers Investment 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 Bankers Investment with a short position of Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankers Investment and Home Depot.
Diversification Opportunities for Bankers Investment and Home Depot
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bankers and Home is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bankers Investment Trust and Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot and Bankers Investment 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 Bankers Investment Trust 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 Bankers Investment i.e., Bankers Investment and Home Depot go up and down completely randomly.
Pair Corralation between Bankers Investment and Home Depot
If you would invest 11,200 in Bankers Investment Trust on August 27, 2024 and sell it today you would earn a total of 380.00 from holding Bankers Investment Trust or generate 3.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bankers Investment Trust vs. Home Depot
Performance |
| Timeline |
| Bankers Investment Trust |
| Home Depot |
Bankers Investment and Home Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankers Investment and Home Depot
The main advantage of trading using opposite Bankers Investment and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankers Investment 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.| Bankers Investment vs. Sunny Optical Technology | Bankers Investment vs. Albion Technology General | Bankers Investment vs. Check Point Software | Bankers Investment vs. Bisichi Mining PLC |
| Home Depot vs. Walmart | Home Depot vs. Volkswagen AG | Home Depot vs. Volkswagen AG Non Vtg | Home Depot vs. Compass Group PLC |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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