Correlation Between Home Depot and Gogoro
Can any of the company-specific risk be diversified away by investing in both Home Depot and Gogoro 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 Gogoro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Gogoro Inc, you can compare the effects of market volatilities on Home Depot and Gogoro 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 Gogoro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Gogoro.
Diversification Opportunities for Home Depot and Gogoro
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Home and Gogoro is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Gogoro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gogoro Inc 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 Gogoro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gogoro Inc has no effect on the direction of Home Depot i.e., Home Depot and Gogoro go up and down completely randomly.
Pair Corralation between Home Depot and Gogoro
Allowing for the 90-day total investment horizon Home Depot is expected to generate 1.72 times less return on investment than Gogoro. But when comparing it to its historical volatility, Home Depot is 3.95 times less risky than Gogoro. It trades about 0.26 of its potential returns per unit of risk. Gogoro Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 50.00 in Gogoro Inc on August 30, 2024 and sell it today you would earn a total of 6.00 from holding Gogoro Inc or generate 12.0% 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. Gogoro Inc
Performance |
| Timeline |
| Home Depot |
| Gogoro Inc |
Home Depot and Gogoro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Gogoro
The main advantage of trading using opposite Home Depot and Gogoro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Gogoro 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 Gogoro will offset losses from the drop in Gogoro'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 |
| Gogoro vs. Motorcar Parts of | Gogoro vs. Stoneridge | Gogoro vs. Superior Industries International | Gogoro vs. Lear Corporation |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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