Correlation Between Home Depot and Argo Blockchain
Can any of the company-specific risk be diversified away by investing in both Home Depot and Argo Blockchain 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 Argo Blockchain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Argo Blockchain PLC, you can compare the effects of market volatilities on Home Depot and Argo Blockchain 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 Argo Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Argo Blockchain.
Diversification Opportunities for Home Depot and Argo Blockchain
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Home and Argo is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Argo Blockchain PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Blockchain PLC 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 are associated (or correlated) with Argo Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Blockchain PLC has no effect on the direction of Home Depot i.e., Home Depot and Argo Blockchain go up and down completely randomly.
Pair Corralation between Home Depot and Argo Blockchain
Allowing for the 90-day total investment horizon Home Depot is expected to generate 0.15 times more return on investment than Argo Blockchain. However, Home Depot is 6.83 times less risky than Argo Blockchain. It trades about 0.18 of its potential returns per unit of risk. Argo Blockchain PLC is currently generating about 0.02 per unit of risk. If you would invest 32,432 in Home Depot on September 1, 2024 and sell it today you would earn a total of 10,481 from holding Home Depot or generate 32.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Depot vs. Argo Blockchain PLC
Performance |
| Timeline |
| Home Depot |
| Argo Blockchain PLC |
Home Depot and Argo Blockchain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Argo Blockchain
The main advantage of trading using opposite Home Depot and Argo Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Argo Blockchain 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 Argo Blockchain will offset losses from the drop in Argo Blockchain's long position.| Home Depot vs. Floor Decor Holdings | Home Depot vs. Arhaus Inc | Home Depot vs. Haverty Furniture Companies | Home Depot vs. Lowes Companies |
| Argo Blockchain vs. Morgan Stanley | Argo Blockchain vs. Goldman Sachs Group | Argo Blockchain vs. HUMANA INC | Argo Blockchain vs. SCOR PK |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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