Correlation Between Home Depot and 548661EJ2
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By analyzing existing cross correlation between Home Depot and LOW 425 01 APR 52, you can compare the effects of market volatilities on Home Depot and 548661EJ2 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 548661EJ2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and 548661EJ2.
Diversification Opportunities for Home Depot and 548661EJ2
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Home and 548661EJ2 is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and LOW 425 01 APR 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOW 425 01 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 548661EJ2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOW 425 01 has no effect on the direction of Home Depot i.e., Home Depot and 548661EJ2 go up and down completely randomly.
Pair Corralation between Home Depot and 548661EJ2
Allowing for the 90-day total investment horizon Home Depot is expected to generate 1.19 times less return on investment than 548661EJ2. In addition to that, Home Depot is 1.13 times more volatile than LOW 425 01 APR 52. It trades about 0.15 of its total potential returns per unit of risk. LOW 425 01 APR 52 is currently generating about 0.21 per unit of volatility. If you would invest 8,061 in LOW 425 01 APR 52 on September 12, 2024 and sell it today you would earn a total of 377.00 from holding LOW 425 01 APR 52 or generate 4.68% 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. LOW 425 01 APR 52
Performance |
| Timeline |
| Home Depot |
| LOW 425 01 |
Home Depot and 548661EJ2 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and 548661EJ2
The main advantage of trading using opposite Home Depot and 548661EJ2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, 548661EJ2 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 548661EJ2 will offset losses from the drop in 548661EJ2'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 |
| 548661EJ2 vs. China Aircraft Leasing | 548661EJ2 vs. Fortress Transp Infra | 548661EJ2 vs. United Rentals | 548661EJ2 vs. First Ship Lease |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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