Correlation Between Home Depot and PT Global
Can any of the company-specific risk be diversified away by investing in both Home Depot and PT Global 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 PT Global 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 PT Global Mediacom, you can compare the effects of market volatilities on Home Depot and PT Global 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 PT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and PT Global.
Diversification Opportunities for Home Depot and PT Global
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Home and 06L is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding The Home Depot and PT Global Mediacom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Global Mediacom 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 PT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Global Mediacom has no effect on the direction of Home Depot i.e., Home Depot and PT Global go up and down completely randomly.
Pair Corralation between Home Depot and PT Global
If you would invest 37,225 in The Home Depot on August 28, 2024 and sell it today you would earn a total of 3,575 from holding The Home Depot or generate 9.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Home Depot vs. PT Global Mediacom
Performance |
| Timeline |
| Home Depot |
| PT Global Mediacom |
Home Depot and PT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and PT Global
The main advantage of trading using opposite Home Depot and PT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, PT Global 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 PT Global will offset losses from the drop in PT Global's long position.| Home Depot vs. Superior Plus Corp | Home Depot vs. NMI Holdings | Home Depot vs. Origin Agritech | Home Depot vs. SIVERS SEMICONDUCTORS AB |
| PT Global vs. LGI Homes | PT Global vs. INVITATION HOMES DL | PT Global vs. American Homes 4 | PT Global vs. The Home Depot |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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