Correlation Between Home Depot and 06406GAA9
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By analyzing existing cross correlation between Home Depot and BANK NEW YORK, you can compare the effects of market volatilities on Home Depot and 06406GAA9 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 06406GAA9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and 06406GAA9.
Diversification Opportunities for Home Depot and 06406GAA9
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Home and 06406GAA9 is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and BANK NEW YORK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK NEW YORK 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 06406GAA9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK NEW YORK has no effect on the direction of Home Depot i.e., Home Depot and 06406GAA9 go up and down completely randomly.
Pair Corralation between Home Depot and 06406GAA9
Allowing for the 90-day total investment horizon Home Depot is expected to generate 1.64 times more return on investment than 06406GAA9. However, Home Depot is 1.64 times more volatile than BANK NEW YORK. It trades about 0.2 of its potential returns per unit of risk. BANK NEW YORK is currently generating about -0.18 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Depot vs. BANK NEW YORK
Performance |
| Timeline |
| Home Depot |
| BANK NEW YORK |
Home Depot and 06406GAA9 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and 06406GAA9
The main advantage of trading using opposite Home Depot and 06406GAA9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, 06406GAA9 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 06406GAA9 will offset losses from the drop in 06406GAA9's long position.| Home Depot vs. Arhaus Inc | Home Depot vs. Haverty Furniture Companies | Home Depot vs. Kirklands | Home Depot vs. Haverty Furniture Companies |
| 06406GAA9 vs. AEP TEX INC | 06406GAA9 vs. US BANK NATIONAL | 06406GAA9 vs. Eat Beyond Global | 06406GAA9 vs. Charles Schwab 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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