Correlation Between Home Depot and CABKSM
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By analyzing existing cross correlation between Home Depot and CABKSM 6208 18 JAN 29, you can compare the effects of market volatilities on Home Depot and CABKSM 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 CABKSM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and CABKSM.
Diversification Opportunities for Home Depot and CABKSM
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Home and CABKSM is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and CABKSM 6208 18 JAN 29 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CABKSM 6208 18 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 CABKSM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CABKSM 6208 18 has no effect on the direction of Home Depot i.e., Home Depot and CABKSM go up and down completely randomly.
Pair Corralation between Home Depot and CABKSM
Allowing for the 90-day total investment horizon Home Depot is expected to generate 4.5 times more return on investment than CABKSM. However, Home Depot is 4.5 times more volatile than CABKSM 6208 18 JAN 29. It trades about 0.3 of its potential returns per unit of risk. CABKSM 6208 18 JAN 29 is currently generating about -0.16 per unit of risk. If you would invest 39,169 in Home Depot on September 1, 2024 and sell it today you would earn a total of 3,744 from holding Home Depot or generate 9.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.95% |
| Values | Daily Returns |
Home Depot vs. CABKSM 6208 18 JAN 29
Performance |
| Timeline |
| Home Depot |
| CABKSM 6208 18 |
Home Depot and CABKSM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and CABKSM
The main advantage of trading using opposite Home Depot and CABKSM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, CABKSM 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 CABKSM will offset losses from the drop in CABKSM'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 |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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