Correlation Between Home Depot and Sit Dividend
Can any of the company-specific risk be diversified away by investing in both Home Depot and Sit Dividend 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 Sit Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Sit Dividend Growth, you can compare the effects of market volatilities on Home Depot and Sit Dividend 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 Sit Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Sit Dividend.
Diversification Opportunities for Home Depot and Sit Dividend
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Home and Sit is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Sit Dividend Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Dividend Growth 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 Sit Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Dividend Growth has no effect on the direction of Home Depot i.e., Home Depot and Sit Dividend go up and down completely randomly.
Pair Corralation between Home Depot and Sit Dividend
Allowing for the 90-day total investment horizon Home Depot is expected to generate 2.04 times more return on investment than Sit Dividend. However, Home Depot is 2.04 times more volatile than Sit Dividend Growth. It trades about 0.19 of its potential returns per unit of risk. Sit Dividend Growth is currently generating about 0.17 per unit of risk. If you would invest 40,289 in Home Depot on August 29, 2024 and sell it today you would earn a total of 2,663 from holding Home Depot or generate 6.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Depot vs. Sit Dividend Growth
Performance |
| Timeline |
| Home Depot |
| Sit Dividend Growth |
Home Depot and Sit Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Sit Dividend
The main advantage of trading using opposite Home Depot and Sit Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Sit Dividend 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 Sit Dividend will offset losses from the drop in Sit Dividend'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 |
| Sit Dividend vs. Matthews Asia Dividend | Sit Dividend vs. Sit Dividend Growth | Sit Dividend vs. Jpmorgan Unconstrained Debt | Sit Dividend vs. Harbor Vertible Securities |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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