Correlation Between HOME DEPOT and Ascot Resources
Can any of the company-specific risk be diversified away by investing in both HOME DEPOT and Ascot Resources 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 HOME DEPOT and Ascot Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HOME DEPOT CDR and Ascot Resources, you can compare the effects of market volatilities on HOME DEPOT and Ascot Resources 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 Ascot Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOME DEPOT and Ascot Resources.
Diversification Opportunities for HOME DEPOT and Ascot Resources
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between HOME and Ascot is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding HOME DEPOT CDR and Ascot Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascot Resources 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 HOME DEPOT CDR are associated (or correlated) with Ascot Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascot Resources has no effect on the direction of HOME DEPOT i.e., HOME DEPOT and Ascot Resources go up and down completely randomly.
Pair Corralation between HOME DEPOT and Ascot Resources
Assuming the 90 days trading horizon HOME DEPOT is expected to generate 1.13 times less return on investment than Ascot Resources. But when comparing it to its historical volatility, HOME DEPOT CDR is 6.33 times less risky than Ascot Resources. It trades about 0.19 of its potential returns per unit of risk. Ascot Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Ascot Resources on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Ascot Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HOME DEPOT CDR vs. Ascot Resources
Performance |
| Timeline |
| HOME DEPOT CDR |
| Ascot Resources |
HOME DEPOT and Ascot Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HOME DEPOT and Ascot Resources
The main advantage of trading using opposite HOME DEPOT and Ascot Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOME DEPOT position performs unexpectedly, Ascot Resources 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 Ascot Resources will offset losses from the drop in Ascot Resources' long position.| HOME DEPOT vs. Walmart Inc CDR | HOME DEPOT vs. Amazon CDR | HOME DEPOT vs. UPS CDR | HOME DEPOT vs. UnitedHealth Group CDR |
| Ascot Resources vs. Profound Medical Corp | Ascot Resources vs. Canadian Utilities Limited | Ascot Resources vs. HOME DEPOT CDR | Ascot Resources vs. Bird Construction |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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