Correlation Between Home Depot and Joann
Can any of the company-specific risk be diversified away by investing in both Home Depot and Joann 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 Joann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Joann Inc, you can compare the effects of market volatilities on Home Depot and Joann 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 Joann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Joann.
Diversification Opportunities for Home Depot and Joann
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Home and Joann is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Joann Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joann 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 Joann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joann Inc has no effect on the direction of Home Depot i.e., Home Depot and Joann go up and down completely randomly.
Pair Corralation between Home Depot and Joann
If you would invest 30,541 in Home Depot on August 24, 2024 and sell it today you would earn a total of 11,120 from holding Home Depot or generate 36.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
Home Depot vs. Joann Inc
Performance |
| Timeline |
| Home Depot |
| Joann Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Home Depot and Joann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Joann
The main advantage of trading using opposite Home Depot and Joann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Joann 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 Joann will offset losses from the drop in Joann's long position.| Home Depot vs. Live Ventures | Home Depot vs. Haverty Furniture Companies | Home Depot vs. Lowes Companies | Home Depot vs. Tile Shop Holdings |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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