Correlation Between Home Depot and Jpmorgan Hedged
Can any of the company-specific risk be diversified away by investing in both Home Depot and Jpmorgan Hedged 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 Jpmorgan Hedged into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Jpmorgan Hedged Equity, you can compare the effects of market volatilities on Home Depot and Jpmorgan Hedged 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 Jpmorgan Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Jpmorgan Hedged.
Diversification Opportunities for Home Depot and Jpmorgan Hedged
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Home and Jpmorgan is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Jpmorgan Hedged Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Hedged Equity 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 Jpmorgan Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Hedged Equity has no effect on the direction of Home Depot i.e., Home Depot and Jpmorgan Hedged go up and down completely randomly.
Pair Corralation between Home Depot and Jpmorgan Hedged
Allowing for the 90-day total investment horizon Home Depot is expected to generate 3.79 times less return on investment than Jpmorgan Hedged. In addition to that, Home Depot is 3.8 times more volatile than Jpmorgan Hedged Equity. It trades about 0.01 of its total potential returns per unit of risk. Jpmorgan Hedged Equity is currently generating about 0.11 per unit of volatility. If you would invest 3,313 in Jpmorgan Hedged Equity on November 18, 2024 and sell it today you would earn a total of 25.00 from holding Jpmorgan Hedged Equity or generate 0.75% 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. Jpmorgan Hedged Equity
Performance |
| Timeline |
| Home Depot |
| Jpmorgan Hedged Equity |
Home Depot and Jpmorgan Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Jpmorgan Hedged
The main advantage of trading using opposite Home Depot and Jpmorgan Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Jpmorgan Hedged 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 Jpmorgan Hedged will offset losses from the drop in Jpmorgan Hedged's long position.| Home Depot vs. Arhaus Inc | Home Depot vs. Haverty Furniture Companies | Home Depot vs. Lowes Companies | Home Depot vs. Kirklands |
| Jpmorgan Hedged vs. Jpmorgan Hedged Equity | Jpmorgan Hedged vs. Jpmorgan Hedged Equity | Jpmorgan Hedged vs. Jpmorgan Hedged Equity | Jpmorgan Hedged vs. Loomis Sayles Global |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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