Correlation Between Home Depot and Gander Gold
Can any of the company-specific risk be diversified away by investing in both Home Depot and Gander Gold 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 Gander Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Gander Gold, you can compare the effects of market volatilities on Home Depot and Gander Gold 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 Gander Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Gander Gold.
Diversification Opportunities for Home Depot and Gander Gold
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Home and Gander is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Gander Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gander Gold 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 Gander Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gander Gold has no effect on the direction of Home Depot i.e., Home Depot and Gander Gold go up and down completely randomly.
Pair Corralation between Home Depot and Gander Gold
Allowing for the 90-day total investment horizon Home Depot is expected to generate 22.1 times less return on investment than Gander Gold. But when comparing it to its historical volatility, Home Depot is 40.76 times less risky than Gander Gold. It trades about 0.18 of its potential returns per unit of risk. Gander Gold is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3.25 in Gander Gold on September 1, 2024 and sell it today you would earn a total of 10.75 from holding Gander Gold or generate 330.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Home Depot vs. Gander Gold
Performance |
| Timeline |
| Home Depot |
| Gander Gold |
Home Depot and Gander Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Gander Gold
The main advantage of trading using opposite Home Depot and Gander Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Gander Gold 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 Gander Gold will offset losses from the drop in Gander Gold'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 |
| Gander Gold vs. Sokoman Minerals Corp | Gander Gold vs. Bonterra Resources | Gander Gold vs. Labrador Gold Corp | Gander Gold vs. Precipitate Gold Corp |
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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