Correlation Between Home Depot and WisdomTree Inflation
Can any of the company-specific risk be diversified away by investing in both Home Depot and WisdomTree Inflation 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 WisdomTree Inflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Home Depot and WisdomTree Inflation Plus, you can compare the effects of market volatilities on Home Depot and WisdomTree Inflation 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 WisdomTree Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and WisdomTree Inflation.
Diversification Opportunities for Home Depot and WisdomTree Inflation
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Home and WisdomTree is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding The Home Depot and WisdomTree Inflation Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Inflation Plus 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 The Home Depot are associated (or correlated) with WisdomTree Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Inflation Plus has no effect on the direction of Home Depot i.e., Home Depot and WisdomTree Inflation go up and down completely randomly.
Pair Corralation between Home Depot and WisdomTree Inflation
Allowing for the 90-day total investment horizon Home Depot is expected to generate 8.44 times less return on investment than WisdomTree Inflation. In addition to that, Home Depot is 2.08 times more volatile than WisdomTree Inflation Plus. It trades about 0.01 of its total potential returns per unit of risk. WisdomTree Inflation Plus is currently generating about 0.18 per unit of volatility. If you would invest 2,939 in WisdomTree Inflation Plus on October 9, 2025 and sell it today you would earn a total of 530.00 from holding WisdomTree Inflation Plus or generate 18.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 28.14% |
| Values | Daily Returns |
The Home Depot vs. WisdomTree Inflation Plus
Performance |
| Timeline |
| Home Depot |
| WisdomTree Inflation Plus |
Home Depot and WisdomTree Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and WisdomTree Inflation
The main advantage of trading using opposite Home Depot and WisdomTree Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, WisdomTree Inflation 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 WisdomTree Inflation will offset losses from the drop in WisdomTree Inflation's long position.| Home Depot vs. Alibaba Group Holding | Home Depot vs. Lowes Companies | Home Depot vs. Toyota Motor | Home Depot vs. McDonalds |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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