Correlation Between Home Depot and Cellectis
Can any of the company-specific risk be diversified away by investing in both Home Depot and Cellectis 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 Cellectis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Cellectis SA, you can compare the effects of market volatilities on Home Depot and Cellectis 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 Cellectis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Cellectis.
Diversification Opportunities for Home Depot and Cellectis
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Home and Cellectis is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Cellectis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellectis SA 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 Cellectis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellectis SA has no effect on the direction of Home Depot i.e., Home Depot and Cellectis go up and down completely randomly.
Pair Corralation between Home Depot and Cellectis
Allowing for the 90-day total investment horizon Home Depot is expected to generate 0.38 times more return on investment than Cellectis. However, Home Depot is 2.62 times less risky than Cellectis. It trades about 0.05 of its potential returns per unit of risk. Cellectis SA is currently generating about -0.03 per unit of risk. If you would invest 37,347 in Home Depot on August 27, 2024 and sell it today you would earn a total of 4,653 from holding Home Depot or generate 12.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Depot vs. Cellectis SA
Performance |
| Timeline |
| Home Depot |
| Cellectis SA |
Home Depot and Cellectis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Cellectis
The main advantage of trading using opposite Home Depot and Cellectis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Cellectis 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 Cellectis will offset losses from the drop in Cellectis' long position.The idea behind Home Depot and Cellectis SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Cellectis vs. Eliem Therapeutics | Cellectis vs. HCW Biologics | Cellectis vs. Scpharmaceuticals | Cellectis vs. Milestone Pharmaceuticals |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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