Correlation Between Home Depot and Breeze Holdings
Can any of the company-specific risk be diversified away by investing in both Home Depot and Breeze Holdings 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 Breeze Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Breeze Holdings Acquisition, you can compare the effects of market volatilities on Home Depot and Breeze Holdings 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 Breeze Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Breeze Holdings.
Diversification Opportunities for Home Depot and Breeze Holdings
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Home and Breeze is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Breeze Holdings Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Breeze Holdings Acqu 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 Breeze Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Breeze Holdings Acqu has no effect on the direction of Home Depot i.e., Home Depot and Breeze Holdings go up and down completely randomly.
Pair Corralation between Home Depot and Breeze Holdings
If you would invest 36,940 in Home Depot on September 1, 2024 and sell it today you would earn a total of 5,973 from holding Home Depot or generate 16.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.53% |
| Values | Daily Returns |
Home Depot vs. Breeze Holdings Acquisition
Performance |
| Timeline |
| Home Depot |
| Breeze Holdings Acqu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Home Depot and Breeze Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Breeze Holdings
The main advantage of trading using opposite Home Depot and Breeze Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Breeze Holdings 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 Breeze Holdings will offset losses from the drop in Breeze Holdings' long position.| Home Depot vs. Floor Decor Holdings | Home Depot vs. Arhaus Inc | Home Depot vs. Haverty Furniture Companies | Home Depot vs. Lowes Companies |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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