Correlation Between Home Depot and Farmacias Benavides
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By analyzing existing cross correlation between The Home Depot and Farmacias Benavides SAB, you can compare the effects of market volatilities on Home Depot and Farmacias Benavides 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 Farmacias Benavides. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Farmacias Benavides.
Diversification Opportunities for Home Depot and Farmacias Benavides
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Home and Farmacias is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding The Home Depot and Farmacias Benavides SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmacias Benavides SAB 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 The Home Depot are associated (or correlated) with Farmacias Benavides. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmacias Benavides SAB has no effect on the direction of Home Depot i.e., Home Depot and Farmacias Benavides go up and down completely randomly.
Pair Corralation between Home Depot and Farmacias Benavides
Assuming the 90 days horizon The Home Depot is expected to generate 1.75 times more return on investment than Farmacias Benavides. However, Home Depot is 1.75 times more volatile than Farmacias Benavides SAB. It trades about 0.15 of its potential returns per unit of risk. Farmacias Benavides SAB is currently generating about 0.22 per unit of risk. If you would invest 808,491 in The Home Depot on November 2, 2024 and sell it today you would earn a total of 43,009 from holding The Home Depot or generate 5.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Home Depot vs. Farmacias Benavides SAB
Performance |
| Timeline |
| Home Depot |
| Farmacias Benavides SAB |
Home Depot and Farmacias Benavides Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Farmacias Benavides
The main advantage of trading using opposite Home Depot and Farmacias Benavides positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Farmacias Benavides 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 Farmacias Benavides will offset losses from the drop in Farmacias Benavides' long position.| Home Depot vs. Micron Technology | Home Depot vs. Monster Beverage Corp | Home Depot vs. DXC Technology | Home Depot vs. McEwen Mining |
| Farmacias Benavides vs. iShares Global Timber | Farmacias Benavides vs. Vanguard World | Farmacias Benavides vs. iShares Trust | Farmacias Benavides vs. iShares Trust |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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