Correlation Between Home Depot and Telesat Corp
Can any of the company-specific risk be diversified away by investing in both Home Depot and Telesat Corp 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 Telesat Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Telesat Corp, you can compare the effects of market volatilities on Home Depot and Telesat Corp 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 Telesat Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Telesat Corp.
Diversification Opportunities for Home Depot and Telesat Corp
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Home and Telesat is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Telesat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telesat Corp 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 Telesat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telesat Corp has no effect on the direction of Home Depot i.e., Home Depot and Telesat Corp go up and down completely randomly.
Pair Corralation between Home Depot and Telesat Corp
Allowing for the 90-day total investment horizon Home Depot is expected to under-perform the Telesat Corp. But the stock apears to be less risky and, when comparing its historical volatility, Home Depot is 4.14 times less risky than Telesat Corp. The stock trades about -0.26 of its potential returns per unit of risk. The Telesat Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,730 in Telesat Corp on January 9, 2025 and sell it today you would earn a total of 95.00 from holding Telesat Corp or generate 5.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Depot vs. Telesat Corp
Performance |
| Timeline |
| Home Depot |
| Telesat Corp |
Home Depot and Telesat Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Telesat Corp
The main advantage of trading using opposite Home Depot and Telesat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Telesat Corp 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 Telesat Corp will offset losses from the drop in Telesat Corp'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 |
| Telesat Corp vs. KVH Industries | Telesat Corp vs. Comtech Telecommunications Corp | Telesat Corp vs. Knowles Cor | Telesat Corp vs. Ituran Location and |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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