Correlation Between Home Depot and MASSMU
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By analyzing existing cross correlation between Home Depot and MASSMU 215 09 MAR 31, you can compare the effects of market volatilities on Home Depot and MASSMU 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 MASSMU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and MASSMU.
Diversification Opportunities for Home Depot and MASSMU
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Home and MASSMU is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and MASSMU 215 09 MAR 31 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MASSMU 215 09 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 MASSMU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MASSMU 215 09 has no effect on the direction of Home Depot i.e., Home Depot and MASSMU go up and down completely randomly.
Pair Corralation between Home Depot and MASSMU
Allowing for the 90-day total investment horizon Home Depot is expected to generate 2.73 times more return on investment than MASSMU. However, Home Depot is 2.73 times more volatile than MASSMU 215 09 MAR 31. It trades about 0.3 of its potential returns per unit of risk. MASSMU 215 09 MAR 31 is currently generating about 0.58 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 | 14.29% |
| Values | Daily Returns |
Home Depot vs. MASSMU 215 09 MAR 31
Performance |
| Timeline |
| Home Depot |
| MASSMU 215 09 |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Home Depot and MASSMU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and MASSMU
The main advantage of trading using opposite Home Depot and MASSMU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, MASSMU 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 MASSMU will offset losses from the drop in MASSMU'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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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