Correlation Between Home Depot and SOUTHERN
Specify exactly 2 symbols:
By analyzing existing cross correlation between Home Depot and SOUTHERN CALIF EDISON, you can compare the effects of market volatilities on Home Depot and SOUTHERN 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 SOUTHERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and SOUTHERN.
Diversification Opportunities for Home Depot and SOUTHERN
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Home and SOUTHERN is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and SOUTHERN CALIF EDISON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHERN CALIF EDISON 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 SOUTHERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHERN CALIF EDISON has no effect on the direction of Home Depot i.e., Home Depot and SOUTHERN go up and down completely randomly.
Pair Corralation between Home Depot and SOUTHERN
Allowing for the 90-day total investment horizon Home Depot is expected to generate 32.1 times less return on investment than SOUTHERN. But when comparing it to its historical volatility, Home Depot is 40.24 times less risky than SOUTHERN. It trades about 0.06 of its potential returns per unit of risk. SOUTHERN CALIF EDISON is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 8,624 in SOUTHERN CALIF EDISON on September 12, 2024 and sell it today you would earn a total of 340.00 from holding SOUTHERN CALIF EDISON or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 73.33% |
| Values | Daily Returns |
Home Depot vs. SOUTHERN CALIF EDISON
Performance |
| Timeline |
| Home Depot |
| SOUTHERN CALIF EDISON |
Home Depot and SOUTHERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and SOUTHERN
The main advantage of trading using opposite Home Depot and SOUTHERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, SOUTHERN 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 SOUTHERN will offset losses from the drop in SOUTHERN'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 |
| SOUTHERN vs. LGI Homes | SOUTHERN vs. Algoma Steel Group | SOUTHERN vs. Insteel Industries | SOUTHERN vs. Lindblad Expeditions Holdings |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |