Correlation Between Home Depot and MF Bancorp
Can any of the company-specific risk be diversified away by investing in both Home Depot and MF Bancorp 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 MF Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and MF Bancorp, you can compare the effects of market volatilities on Home Depot and MF Bancorp 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 MF Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and MF Bancorp.
Diversification Opportunities for Home Depot and MF Bancorp
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Home and MFBP is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and MF Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MF Bancorp 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 MF Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MF Bancorp has no effect on the direction of Home Depot i.e., Home Depot and MF Bancorp go up and down completely randomly.
Pair Corralation between Home Depot and MF Bancorp
Allowing for the 90-day total investment horizon Home Depot is expected to generate 0.82 times more return on investment than MF Bancorp. However, Home Depot is 1.23 times less risky than MF Bancorp. It trades about 0.16 of its potential returns per unit of risk. MF Bancorp is currently generating about 0.07 per unit of risk. If you would invest 39,891 in Home Depot on August 26, 2024 and sell it today you would earn a total of 2,109 from holding Home Depot or generate 5.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Depot vs. MF Bancorp
Performance |
| Timeline |
| Home Depot |
| MF Bancorp |
Home Depot and MF Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and MF Bancorp
The main advantage of trading using opposite Home Depot and MF Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, MF Bancorp 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 MF Bancorp will offset losses from the drop in MF Bancorp's long position.| Home Depot vs. Arhaus Inc | Home Depot vs. Haverty Furniture Companies | Home Depot vs. Kirklands | Home Depot vs. Haverty Furniture Companies |
| MF Bancorp vs. Citizens Bancshares Corp | MF Bancorp vs. Harbor Bankshares | MF Bancorp vs. United Bancorporation of | MF Bancorp vs. KS Bancorp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |