Correlation Between Companhia Habitasul and Home Depot
Can any of the company-specific risk be diversified away by investing in both Companhia Habitasul 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 Companhia Habitasul and Home Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Companhia Habitasul de and The Home Depot, you can compare the effects of market volatilities on Companhia Habitasul 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 Companhia Habitasul with a short position of Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Habitasul and Home Depot.
Diversification Opportunities for Companhia Habitasul and Home Depot
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Companhia and Home is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Habitasul de and The Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot and Companhia Habitasul 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 Companhia Habitasul de 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 Companhia Habitasul i.e., Companhia Habitasul and Home Depot go up and down completely randomly.
Pair Corralation between Companhia Habitasul and Home Depot
Assuming the 90 days trading horizon Companhia Habitasul de is expected to under-perform the Home Depot. In addition to that, Companhia Habitasul is 2.63 times more volatile than The Home Depot. It trades about -0.05 of its total potential returns per unit of risk. The Home Depot is currently generating about 0.13 per unit of volatility. If you would invest 5,405 in The Home Depot on August 26, 2024 and sell it today you would earn a total of 3,295 from holding The Home Depot or generate 60.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 71.6% |
| Values | Daily Returns |
Companhia Habitasul de vs. The Home Depot
Performance |
| Timeline |
| Companhia Habitasul |
| Home Depot |
Companhia Habitasul and Home Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Habitasul and Home Depot
The main advantage of trading using opposite Companhia Habitasul and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Habitasul 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.| Companhia Habitasul vs. BTG Pactual Logstica | Companhia Habitasul vs. Plano Plano Desenvolvimento | Companhia Habitasul vs. Cable One | Companhia Habitasul vs. ATMA Participaes SA |
| Home Depot vs. Fras le SA | Home Depot vs. Clave Indices De | Home Depot vs. BTG Pactual Logstica | Home Depot vs. Telefonaktiebolaget LM Ericsson |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |