Correlation Between Home Depot and Screaming Eagle
Can any of the company-specific risk be diversified away by investing in both Home Depot and Screaming Eagle 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 Screaming Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Screaming Eagle Acquisition, you can compare the effects of market volatilities on Home Depot and Screaming Eagle 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 Screaming Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Screaming Eagle.
Diversification Opportunities for Home Depot and Screaming Eagle
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Home and Screaming is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Screaming Eagle Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Screaming Eagle Acqu 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 Screaming Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Screaming Eagle Acqu has no effect on the direction of Home Depot i.e., Home Depot and Screaming Eagle go up and down completely randomly.
Pair Corralation between Home Depot and Screaming Eagle
If you would invest 32,432 in Home Depot on September 1, 2024 and sell it today you would earn a total of 10,481 from holding Home Depot or generate 32.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
Home Depot vs. Screaming Eagle Acquisition
Performance |
| Timeline |
| Home Depot |
| Screaming Eagle Acqu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Home Depot and Screaming Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Screaming Eagle
The main advantage of trading using opposite Home Depot and Screaming Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Screaming Eagle 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 Screaming Eagle will offset losses from the drop in Screaming Eagle's long position.| Home Depot vs. Floor Decor Holdings | Home Depot vs. Arhaus Inc | Home Depot vs. Haverty Furniture Companies | Home Depot vs. Lowes 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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