Correlation Between Home Depot and LOWES
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By analyzing existing cross correlation between Home Depot and LOWES PANIES INC, you can compare the effects of market volatilities on Home Depot and LOWES 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 LOWES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and LOWES.
Diversification Opportunities for Home Depot and LOWES
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Home and LOWES is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and LOWES PANIES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOWES PANIES INC 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 LOWES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOWES PANIES INC has no effect on the direction of Home Depot i.e., Home Depot and LOWES go up and down completely randomly.
Pair Corralation between Home Depot and LOWES
Allowing for the 90-day total investment horizon Home Depot is expected to generate 0.4 times more return on investment than LOWES. However, Home Depot is 2.47 times less risky than LOWES. It trades about 0.15 of its potential returns per unit of risk. LOWES PANIES INC is currently generating about 0.0 per unit of risk. If you would invest 40,615 in Home Depot on September 12, 2024 and sell it today you would earn a total of 1,644 from holding Home Depot or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Home Depot vs. LOWES PANIES INC
Performance |
| Timeline |
| Home Depot |
| LOWES PANIES INC |
Home Depot and LOWES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and LOWES
The main advantage of trading using opposite Home Depot and LOWES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, LOWES 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 LOWES will offset losses from the drop in LOWES's long position.| Home Depot vs. Victory Integrity Smallmid Cap | Home Depot vs. Hilton Worldwide Holdings | Home Depot vs. NVIDIA | Home Depot vs. JPMorgan Chase Co |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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