Correlation Between Home Depot and WALGREENS
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By analyzing existing cross correlation between Home Depot and WALGREENS BOOTS ALLIANCE, you can compare the effects of market volatilities on Home Depot and WALGREENS 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 WALGREENS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and WALGREENS.
Diversification Opportunities for Home Depot and WALGREENS
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Home and WALGREENS is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and WALGREENS BOOTS ALLIANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WALGREENS BOOTS ALLIANCE 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 WALGREENS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WALGREENS BOOTS ALLIANCE has no effect on the direction of Home Depot i.e., Home Depot and WALGREENS go up and down completely randomly.
Pair Corralation between Home Depot and WALGREENS
Allowing for the 90-day total investment horizon Home Depot is expected to generate 0.51 times more return on investment than WALGREENS. However, Home Depot is 1.98 times less risky than WALGREENS. It trades about 0.09 of its potential returns per unit of risk. WALGREENS BOOTS ALLIANCE is currently generating about 0.01 per unit of risk. If you would invest 34,634 in Home Depot on August 28, 2024 and sell it today you would earn a total of 8,233 from holding Home Depot or generate 23.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.34% |
| Values | Daily Returns |
Home Depot vs. WALGREENS BOOTS ALLIANCE
Performance |
| Timeline |
| Home Depot |
| WALGREENS BOOTS ALLIANCE |
Home Depot and WALGREENS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and WALGREENS
The main advantage of trading using opposite Home Depot and WALGREENS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, WALGREENS 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 WALGREENS will offset losses from the drop in WALGREENS's long position.| Home Depot vs. Arhaus Inc | Home Depot vs. Haverty Furniture Companies | Home Depot vs. Kirklands | Home Depot vs. Haverty Furniture Companies |
| WALGREENS vs. Pekin Life Insurance | WALGREENS vs. Cincinnati Financial | WALGREENS vs. The Hanover Insurance | WALGREENS vs. Boston Beer |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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