Correlation Between Home Depot and Amplify Cash
Can any of the company-specific risk be diversified away by investing in both Home Depot and Amplify Cash 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 Amplify Cash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Amplify Cash Flow, you can compare the effects of market volatilities on Home Depot and Amplify Cash 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 Amplify Cash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Amplify Cash.
Diversification Opportunities for Home Depot and Amplify Cash
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Home and Amplify is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Amplify Cash Flow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify Cash Flow 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 Amplify Cash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify Cash Flow has no effect on the direction of Home Depot i.e., Home Depot and Amplify Cash go up and down completely randomly.
Pair Corralation between Home Depot and Amplify Cash
Allowing for the 90-day total investment horizon Home Depot is expected to generate 1.23 times more return on investment than Amplify Cash. However, Home Depot is 1.23 times more volatile than Amplify Cash Flow. It trades about 0.09 of its potential returns per unit of risk. Amplify Cash Flow is currently generating about 0.07 per unit of risk. If you would invest 28,986 in Home Depot on September 2, 2024 and sell it today you would earn a total of 13,927 from holding Home Depot or generate 48.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 81.45% |
| Values | Daily Returns |
Home Depot vs. Amplify Cash Flow
Performance |
| Timeline |
| Home Depot |
| Amplify Cash Flow |
Home Depot and Amplify Cash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Amplify Cash
The main advantage of trading using opposite Home Depot and Amplify Cash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Amplify Cash 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 Amplify Cash will offset losses from the drop in Amplify Cash'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 |
| Amplify Cash vs. Global X Dow | Amplify Cash vs. AdvisorShares STAR Global | Amplify Cash vs. Global X Funds | Amplify Cash vs. FT Vest Dow |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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