Correlation Between Home Depot and Intermap Technologies
Can any of the company-specific risk be diversified away by investing in both Home Depot and Intermap Technologies 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 Intermap Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Intermap Technologies Corp, you can compare the effects of market volatilities on Home Depot and Intermap Technologies 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 Intermap Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Intermap Technologies.
Diversification Opportunities for Home Depot and Intermap Technologies
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Home and Intermap is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Intermap Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermap Technologies 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 Intermap Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermap Technologies has no effect on the direction of Home Depot i.e., Home Depot and Intermap Technologies go up and down completely randomly.
Pair Corralation between Home Depot and Intermap Technologies
Allowing for the 90-day total investment horizon Home Depot is expected to generate 4.47 times less return on investment than Intermap Technologies. But when comparing it to its historical volatility, Home Depot is 4.05 times less risky than Intermap Technologies. It trades about 0.1 of its potential returns per unit of risk. Intermap Technologies Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 40.00 in Intermap Technologies Corp on August 29, 2024 and sell it today you would earn a total of 80.00 from holding Intermap Technologies Corp or generate 200.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Depot vs. Intermap Technologies Corp
Performance |
| Timeline |
| Home Depot |
| Intermap Technologies |
Home Depot and Intermap Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Intermap Technologies
The main advantage of trading using opposite Home Depot and Intermap Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Intermap Technologies 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 Intermap Technologies will offset losses from the drop in Intermap Technologies' long position.| Home Depot vs. Floor Decor Holdings | Home Depot vs. Arhaus Inc | Home Depot vs. Haverty Furniture Companies | Home Depot vs. Lowes Companies |
| Intermap Technologies vs. LifeSpeak | Intermap Technologies vs. RenoWorks Software | Intermap Technologies vs. 01 Communique Laboratory | Intermap Technologies vs. RESAAS Services |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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