Correlation Between HOME DEPOT and Jade Leader
Can any of the company-specific risk be diversified away by investing in both HOME DEPOT and Jade Leader 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 Jade Leader 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 Jade Leader Corp, you can compare the effects of market volatilities on HOME DEPOT and Jade Leader 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 Jade Leader. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOME DEPOT and Jade Leader.
Diversification Opportunities for HOME DEPOT and Jade Leader
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between HOME and Jade is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding HOME DEPOT CDR and Jade Leader Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jade Leader Corp 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 Jade Leader. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jade Leader Corp has no effect on the direction of HOME DEPOT i.e., HOME DEPOT and Jade Leader go up and down completely randomly.
Pair Corralation between HOME DEPOT and Jade Leader
Assuming the 90 days trading horizon HOME DEPOT CDR is expected to generate 0.45 times more return on investment than Jade Leader. However, HOME DEPOT CDR is 2.2 times less risky than Jade Leader. It trades about -0.05 of its potential returns per unit of risk. Jade Leader Corp is currently generating about -0.21 per unit of risk. If you would invest 2,348 in HOME DEPOT CDR on January 10, 2025 and sell it today you would lose (73.00) from holding HOME DEPOT CDR or give up 3.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HOME DEPOT CDR vs. Jade Leader Corp
Performance |
| Timeline |
| HOME DEPOT CDR |
| Jade Leader Corp |
HOME DEPOT and Jade Leader Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HOME DEPOT and Jade Leader
The main advantage of trading using opposite HOME DEPOT and Jade Leader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOME DEPOT position performs unexpectedly, Jade Leader 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 Jade Leader will offset losses from the drop in Jade Leader's long position.| HOME DEPOT vs. Computer Modelling Group | HOME DEPOT vs. Data Communications Management | HOME DEPOT vs. Renoworks Software | HOME DEPOT vs. Algoma Steel Group |
| Jade Leader vs. E L Financial Corp | Jade Leader vs. Pace Metals | Jade Leader vs. Micron Technology, | Jade Leader vs. Theralase Technologies |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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