Correlation Between Home Depot and White Gold
Can any of the company-specific risk be diversified away by investing in both Home Depot and White Gold 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 White Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and White Gold Corp, you can compare the effects of market volatilities on Home Depot and White Gold 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 White Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and White Gold.
Diversification Opportunities for Home Depot and White Gold
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Home and White is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and White Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on White Gold Corp 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 White Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of White Gold Corp has no effect on the direction of Home Depot i.e., Home Depot and White Gold go up and down completely randomly.
Pair Corralation between Home Depot and White Gold
Allowing for the 90-day total investment horizon Home Depot is expected to generate 1.17 times less return on investment than White Gold. But when comparing it to its historical volatility, Home Depot is 4.49 times less risky than White Gold. It trades about 0.12 of its potential returns per unit of risk. White Gold Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 16.00 in White Gold Corp on September 1, 2024 and sell it today you would earn a total of 1.00 from holding White Gold Corp or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Depot vs. White Gold Corp
Performance |
| Timeline |
| Home Depot |
| White Gold Corp |
Home Depot and White Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and White Gold
The main advantage of trading using opposite Home Depot and White Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, White Gold 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 White Gold will offset losses from the drop in White Gold'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 |
| White Gold vs. Aurion Resources | White Gold vs. Rio2 Limited | White Gold vs. Palamina Corp | White Gold vs. BTU Metals Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |