Correlation Between Home Depot and AST SpaceMobile
Can any of the company-specific risk be diversified away by investing in both Home Depot and AST SpaceMobile 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 AST SpaceMobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and AST SpaceMobile, you can compare the effects of market volatilities on Home Depot and AST SpaceMobile 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 AST SpaceMobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and AST SpaceMobile.
Diversification Opportunities for Home Depot and AST SpaceMobile
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Home and AST is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and AST SpaceMobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AST SpaceMobile 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 AST SpaceMobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AST SpaceMobile has no effect on the direction of Home Depot i.e., Home Depot and AST SpaceMobile go up and down completely randomly.
Pair Corralation between Home Depot and AST SpaceMobile
Allowing for the 90-day total investment horizon Home Depot is expected to generate 12.98 times less return on investment than AST SpaceMobile. But when comparing it to its historical volatility, Home Depot is 12.38 times less risky than AST SpaceMobile. It trades about 0.09 of its potential returns per unit of risk. AST SpaceMobile is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 175.00 in AST SpaceMobile on August 31, 2024 and sell it today you would earn a total of 1,174 from holding AST SpaceMobile or generate 670.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 88.24% |
| Values | Daily Returns |
Home Depot vs. AST SpaceMobile
Performance |
| Timeline |
| Home Depot |
| AST SpaceMobile |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Home Depot and AST SpaceMobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and AST SpaceMobile
The main advantage of trading using opposite Home Depot and AST SpaceMobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, AST SpaceMobile 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 AST SpaceMobile will offset losses from the drop in AST SpaceMobile's long position.| Home Depot vs. RLJ Lodging Trust | Home Depot vs. Aquagold International | Home Depot vs. Stepstone Group | Home Depot vs. Morningstar Unconstrained Allocation |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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