Correlation Between Home Depot and PT Sarana
Can any of the company-specific risk be diversified away by investing in both Home Depot and PT Sarana 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 PT Sarana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and PT Sarana Menara, you can compare the effects of market volatilities on Home Depot and PT Sarana 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 PT Sarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and PT Sarana.
Diversification Opportunities for Home Depot and PT Sarana
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Home and SMNUF is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and PT Sarana Menara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sarana Menara 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 PT Sarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sarana Menara has no effect on the direction of Home Depot i.e., Home Depot and PT Sarana go up and down completely randomly.
Pair Corralation between Home Depot and PT Sarana
Allowing for the 90-day total investment horizon Home Depot is expected to generate 0.19 times more return on investment than PT Sarana. However, Home Depot is 5.3 times less risky than PT Sarana. It trades about 0.1 of its potential returns per unit of risk. PT Sarana Menara is currently generating about -0.15 per unit of risk. If you would invest 31,794 in Home Depot on August 29, 2024 and sell it today you would earn a total of 11,013 from holding Home Depot or generate 34.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 23.29% |
| Values | Daily Returns |
Home Depot vs. PT Sarana Menara
Performance |
| Timeline |
| Home Depot |
| PT Sarana Menara |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Home Depot and PT Sarana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and PT Sarana
The main advantage of trading using opposite Home Depot and PT Sarana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, PT Sarana 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 PT Sarana will offset losses from the drop in PT Sarana'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 |
| PT Sarana vs. Proximus NV ADR | PT Sarana vs. Singapore Telecommunications Limited | PT Sarana vs. Telstra Limited | PT Sarana vs. MTN Group Ltd |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |