Correlation Between Home Depot and 91159HHM5

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Home Depot and 91159HHM5 at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Home Depot and 91159HHM5 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and U S BANCORP, you can compare the effects of market volatilities on Home Depot and 91159HHM5 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 91159HHM5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and 91159HHM5.

Diversification Opportunities for Home Depot and 91159HHM5

-0.54
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Home and 91159HHM5 is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and U S BANCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U S BANCORP 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 91159HHM5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U S BANCORP has no effect on the direction of Home Depot i.e., Home Depot and 91159HHM5 go up and down completely randomly.

Pair Corralation between Home Depot and 91159HHM5

Allowing for the 90-day total investment horizon Home Depot is expected to generate 1.52 times more return on investment than 91159HHM5. However, Home Depot is 1.52 times more volatile than U S BANCORP. It trades about 0.3 of its potential returns per unit of risk. U S BANCORP is currently generating about -0.21 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 Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.24%
ValuesDaily Returns

Home Depot  vs.  U S BANCORP

 Performance 
       Timeline  
Home Depot 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Home Depot are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Home Depot exhibited solid returns over the last few months and may actually be approaching a breakup point.
U S BANCORP 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days U S BANCORP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 91159HHM5 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Home Depot and 91159HHM5 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Home Depot and 91159HHM5

The main advantage of trading using opposite Home Depot and 91159HHM5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, 91159HHM5 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 91159HHM5 will offset losses from the drop in 91159HHM5'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
The idea behind Home Depot and U S BANCORP pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
91159HHM5 vs. Old Dominion Freight
91159HHM5 vs. Mesa Air Group
91159HHM5 vs. Saia Inc
91159HHM5 vs. United Airlines 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

Other Complementary Tools

Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Money Managers
Screen money managers from public funds and ETFs managed around the world
FinTech Suite
Use AI to screen and filter profitable investment opportunities
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY