Correlation Between Home Depot and Service
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By analyzing existing cross correlation between Home Depot and Service Properties Trust, you can compare the effects of market volatilities on Home Depot and Service 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 Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Service.
Diversification Opportunities for Home Depot and Service
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Home and Service is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Service Properties Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Service Properties Trust 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 Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Service Properties Trust has no effect on the direction of Home Depot i.e., Home Depot and Service go up and down completely randomly.
Pair Corralation between Home Depot and Service
Allowing for the 90-day total investment horizon Home Depot is expected to generate 1.45 times more return on investment than Service. However, Home Depot is 1.45 times more volatile than Service Properties Trust. It trades about 0.1 of its potential returns per unit of risk. Service Properties Trust is currently generating about -0.02 per unit of risk. If you would invest 32,341 in Home Depot on September 4, 2024 and sell it today you would earn a total of 10,594 from holding Home Depot or generate 32.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Home Depot vs. Service Properties Trust
Performance |
| Timeline |
| Home Depot |
| Service Properties Trust |
Home Depot and Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Service
The main advantage of trading using opposite Home Depot and Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Service 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 Service will offset losses from the drop in Service's long position.| Home Depot vs. Floor Decor Holdings | Home Depot vs. Arhaus Inc | Home Depot vs. Haverty Furniture Companies | Home Depot vs. Kirklands |
| Service vs. Playtika Holding Corp | Service vs. The Gap, | Service vs. National CineMedia | Service vs. Northstar Clean Technologies |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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