Correlation Between Home Depot and Origin Bancorp
Can any of the company-specific risk be diversified away by investing in both Home Depot and Origin 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 Origin 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 Origin Bancorp, you can compare the effects of market volatilities on Home Depot and Origin 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 Origin Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Origin Bancorp.
Diversification Opportunities for Home Depot and Origin Bancorp
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Home and Origin is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Origin Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin 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 Origin Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Bancorp has no effect on the direction of Home Depot i.e., Home Depot and Origin Bancorp go up and down completely randomly.
Pair Corralation between Home Depot and Origin Bancorp
Allowing for the 90-day total investment horizon Home Depot is expected to generate 0.59 times more return on investment than Origin Bancorp. However, Home Depot is 1.69 times less risky than Origin Bancorp. It trades about 0.06 of its potential returns per unit of risk. Origin Bancorp is currently generating about -0.09 per unit of risk. If you would invest 30,524 in Home Depot on August 26, 2024 and sell it today you would earn a total of 11,476 from holding Home Depot or generate 37.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 20.13% |
| Values | Daily Returns |
Home Depot vs. Origin Bancorp
Performance |
| Timeline |
| Home Depot |
| Origin Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Home Depot and Origin Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Origin Bancorp
The main advantage of trading using opposite Home Depot and Origin Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Origin 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 Origin Bancorp will offset losses from the drop in Origin 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 |
| Origin Bancorp vs. Home Federal Bancorp | Origin Bancorp vs. First Financial Northwest | Origin Bancorp vs. First Northwest Bancorp | Origin Bancorp vs. First Capital |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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