Correlation Between Home Depot and Pinstripes Holdings
Can any of the company-specific risk be diversified away by investing in both Home Depot and Pinstripes Holdings 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 Pinstripes Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Pinstripes Holdings, you can compare the effects of market volatilities on Home Depot and Pinstripes Holdings 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 Pinstripes Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Pinstripes Holdings.
Diversification Opportunities for Home Depot and Pinstripes Holdings
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Home and Pinstripes is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Pinstripes Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinstripes Holdings 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 Pinstripes Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinstripes Holdings has no effect on the direction of Home Depot i.e., Home Depot and Pinstripes Holdings go up and down completely randomly.
Pair Corralation between Home Depot and Pinstripes Holdings
Allowing for the 90-day total investment horizon Home Depot is expected to generate 5.96 times less return on investment than Pinstripes Holdings. But when comparing it to its historical volatility, Home Depot is 6.11 times less risky than Pinstripes Holdings. It trades about 0.11 of its potential returns per unit of risk. Pinstripes Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 67.00 in Pinstripes Holdings on August 26, 2024 and sell it today you would earn a total of 18.00 from holding Pinstripes Holdings or generate 26.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Depot vs. Pinstripes Holdings
Performance |
| Timeline |
| Home Depot |
| Pinstripes Holdings |
Home Depot and Pinstripes Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Pinstripes Holdings
The main advantage of trading using opposite Home Depot and Pinstripes Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Pinstripes Holdings 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 Pinstripes Holdings will offset losses from the drop in Pinstripes Holdings' long position.| Home Depot vs. Arhaus Inc | Home Depot vs. Haverty Furniture Companies | Home Depot vs. Kirklands | Home Depot vs. Haverty Furniture Companies |
| Pinstripes Holdings vs. Grupo Televisa SAB | Pinstripes Holdings vs. Ziff Davis | Pinstripes Holdings vs. NETGEAR | Pinstripes Holdings vs. Radcom |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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