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
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Home and 4OL is -0.42. 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 trading horizon The Home Depot is expected to generate 0.6 times more return on investment than MR BRICOLAGE. However, The Home Depot is 1.66 times less risky than MR BRICOLAGE. It trades about 0.41 of its potential returns per unit of risk. MR BRICOLAGE INH is currently generating about 0.08 per unit of risk. If you would invest 35,974 in The Home Depot on September 1, 2024 and sell it today you would earn a total of 4,711 from holding The Home Depot or generate 13.1% 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. FEMALE HEALTH | Home Depot vs. WILLIS LEASE FIN | Home Depot vs. SBM OFFSHORE | Home Depot vs. CVS Health |
| MR BRICOLAGE vs. The Home Depot | MR BRICOLAGE vs. The Home Depot | MR BRICOLAGE vs. HORNBACH Baumarkt AG | MR BRICOLAGE vs. WICKES GROUP PLC |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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