Correlation Between Home Depot and Invesco CurrencyShares
Can any of the company-specific risk be diversified away by investing in both Home Depot and Invesco CurrencyShares 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 Invesco CurrencyShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Invesco CurrencyShares Japanese, you can compare the effects of market volatilities on Home Depot and Invesco CurrencyShares 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 Invesco CurrencyShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Invesco CurrencyShares.
Diversification Opportunities for Home Depot and Invesco CurrencyShares
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Home and Invesco is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Invesco CurrencyShares Japanes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco CurrencyShares 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 Invesco CurrencyShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco CurrencyShares has no effect on the direction of Home Depot i.e., Home Depot and Invesco CurrencyShares go up and down completely randomly.
Pair Corralation between Home Depot and Invesco CurrencyShares
Allowing for the 90-day total investment horizon Home Depot is expected to generate 2.1 times more return on investment than Invesco CurrencyShares. However, Home Depot is 2.1 times more volatile than Invesco CurrencyShares Japanese. It trades about 0.03 of its potential returns per unit of risk. Invesco CurrencyShares Japanese is currently generating about -0.01 per unit of risk. If you would invest 31,341 in Home Depot on January 9, 2025 and sell it today you would earn a total of 4,164 from holding Home Depot or generate 13.29% 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. Invesco CurrencyShares Japanes
Performance |
| Timeline |
| Home Depot |
| Invesco CurrencyShares |
Home Depot and Invesco CurrencyShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Invesco CurrencyShares
The main advantage of trading using opposite Home Depot and Invesco CurrencyShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Invesco CurrencyShares 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 Invesco CurrencyShares will offset losses from the drop in Invesco CurrencyShares' 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |