Correlation Between Home Depot and Juniper II
Can any of the company-specific risk be diversified away by investing in both Home Depot and Juniper II 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 Juniper II into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Juniper II Corp, you can compare the effects of market volatilities on Home Depot and Juniper II 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 Juniper II. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Juniper II.
Diversification Opportunities for Home Depot and Juniper II
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Home and Juniper is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Juniper II Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper II Corp 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 Juniper II. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniper II Corp has no effect on the direction of Home Depot i.e., Home Depot and Juniper II go up and down completely randomly.
Pair Corralation between Home Depot and Juniper II
If you would invest 31,815 in Home Depot on August 26, 2024 and sell it today you would earn a total of 10,185 from holding Home Depot or generate 32.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.3% |
| Values | Daily Returns |
Home Depot vs. Juniper II Corp
Performance |
| Timeline |
| Home Depot |
| Juniper II Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Home Depot and Juniper II Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Juniper II
The main advantage of trading using opposite Home Depot and Juniper II positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Juniper II 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 Juniper II will offset losses from the drop in Juniper II's long position.| Home Depot vs. Arhaus Inc | Home Depot vs. Haverty Furniture Companies | Home Depot vs. Kirklands | Home Depot vs. Haverty Furniture Companies |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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