Correlation Between Home Depot and MR BRICOLAGE
Can any of the company-specific risk be diversified away by investing in both Home Depot and MR BRICOLAGE 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 MR BRICOLAGE 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 MR BRICOLAGE INH, you can compare the effects of market volatilities on Home Depot and MR BRICOLAGE 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 MR BRICOLAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and MR BRICOLAGE.
Diversification Opportunities for Home Depot and MR BRICOLAGE
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Home and 4OL is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding The Home Depot and MR BRICOLAGE INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MR BRICOLAGE INH 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 MR BRICOLAGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MR BRICOLAGE INH has no effect on the direction of Home Depot i.e., Home Depot and MR BRICOLAGE go up and down completely randomly.
Pair Corralation between Home Depot and MR BRICOLAGE
Assuming the 90 days horizon The Home Depot is expected to generate 1.25 times more return on investment than MR BRICOLAGE. However, Home Depot is 1.25 times more volatile than MR BRICOLAGE INH. It trades about 0.22 of its potential returns per unit of risk. MR BRICOLAGE INH is currently generating about -0.05 per unit of risk. If you would invest 36,130 in The Home Depot on August 29, 2024 and sell it today you would earn a total of 4,490 from holding The Home Depot or generate 12.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Home Depot vs. MR BRICOLAGE INH
Performance |
| Timeline |
| Home Depot |
| MR BRICOLAGE INH |
Home Depot and MR BRICOLAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and MR BRICOLAGE
The main advantage of trading using opposite Home Depot and MR BRICOLAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, MR BRICOLAGE 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 MR BRICOLAGE will offset losses from the drop in MR BRICOLAGE's long position.| Home Depot vs. US FOODS HOLDING | Home Depot vs. Pentair plc | Home Depot vs. Astral Foods Limited | Home Depot vs. Monster Beverage Corp |
| MR BRICOLAGE vs. Performance Food Group | MR BRICOLAGE vs. Astral Foods Limited | MR BRICOLAGE vs. Warner Music Group | MR BRICOLAGE vs. CN MODERN DAIRY |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |