Correlation Between Home Depot and Janus Henderson
Can any of the company-specific risk be diversified away by investing in both Home Depot and Janus Henderson 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 Janus Henderson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Janus Henderson Short, you can compare the effects of market volatilities on Home Depot and Janus Henderson 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 Janus Henderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Janus Henderson.
Diversification Opportunities for Home Depot and Janus Henderson
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Home and Janus is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Janus Henderson Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson Short 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 Janus Henderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Henderson Short has no effect on the direction of Home Depot i.e., Home Depot and Janus Henderson go up and down completely randomly.
Pair Corralation between Home Depot and Janus Henderson
Allowing for the 90-day total investment horizon Home Depot is expected to generate 33.9 times more return on investment than Janus Henderson. However, Home Depot is 33.9 times more volatile than Janus Henderson Short. It trades about 0.26 of its potential returns per unit of risk. Janus Henderson Short is currently generating about 0.31 per unit of risk. If you would invest 39,300 in Home Depot on August 30, 2024 and sell it today you would earn a total of 3,419 from holding Home Depot or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Depot vs. Janus Henderson Short
Performance |
| Timeline |
| Home Depot |
| Janus Henderson Short |
Home Depot and Janus Henderson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Janus Henderson
The main advantage of trading using opposite Home Depot and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Janus Henderson 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 Janus Henderson will offset losses from the drop in Janus Henderson'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 |
| Janus Henderson vs. Invesco Variable Rate | Janus Henderson vs. Invesco Ultra Short | Janus Henderson vs. SPDR Bloomberg Investment | Janus Henderson vs. First Trust Low |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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