Correlation Between Home Depot and 00774MAY1
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By analyzing existing cross correlation between Home Depot and AER 34 29 OCT 33, you can compare the effects of market volatilities on Home Depot and 00774MAY1 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 00774MAY1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and 00774MAY1.
Diversification Opportunities for Home Depot and 00774MAY1
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Home and 00774MAY1 is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and AER 34 29 OCT 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AER 34 29 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 00774MAY1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AER 34 29 has no effect on the direction of Home Depot i.e., Home Depot and 00774MAY1 go up and down completely randomly.
Pair Corralation between Home Depot and 00774MAY1
Allowing for the 90-day total investment horizon Home Depot is expected to generate 0.84 times more return on investment than 00774MAY1. However, Home Depot is 1.19 times less risky than 00774MAY1. It trades about 0.15 of its potential returns per unit of risk. AER 34 29 OCT 33 is currently generating about -0.22 per unit of risk. If you would invest 39,964 in Home Depot on August 24, 2024 and sell it today you would earn a total of 2,036 from holding Home Depot or generate 5.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Home Depot vs. AER 34 29 OCT 33
Performance |
| Timeline |
| Home Depot |
| AER 34 29 |
Home Depot and 00774MAY1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and 00774MAY1
The main advantage of trading using opposite Home Depot and 00774MAY1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, 00774MAY1 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 00774MAY1 will offset losses from the drop in 00774MAY1's long position.| Home Depot vs. Live Ventures | Home Depot vs. Haverty Furniture Companies | Home Depot vs. Lowes Companies | Home Depot vs. Tile Shop Holdings |
| 00774MAY1 vs. AEP TEX INC | 00774MAY1 vs. US BANK NATIONAL | 00774MAY1 vs. 3M Company | 00774MAY1 vs. Alcoa Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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