Correlation Between Home Depot and TOPPS TILES
Can any of the company-specific risk be diversified away by investing in both Home Depot and TOPPS TILES 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 TOPPS TILES 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 TOPPS TILES PLC, you can compare the effects of market volatilities on Home Depot and TOPPS TILES 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 TOPPS TILES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and TOPPS TILES.
Diversification Opportunities for Home Depot and TOPPS TILES
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Home and TOPPS is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding The Home Depot and TOPPS TILES PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOPPS TILES PLC 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 TOPPS TILES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOPPS TILES PLC has no effect on the direction of Home Depot i.e., Home Depot and TOPPS TILES go up and down completely randomly.
Pair Corralation between Home Depot and TOPPS TILES
Assuming the 90 days trading horizon The Home Depot is expected to generate 0.59 times more return on investment than TOPPS TILES. However, The Home Depot is 1.69 times less risky than TOPPS TILES. It trades about 0.05 of its potential returns per unit of risk. TOPPS TILES PLC is currently generating about 0.0 per unit of risk. If you would invest 29,828 in The Home Depot on September 3, 2024 and sell it today you would earn a total of 10,857 from holding The Home Depot or generate 36.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Home Depot vs. TOPPS TILES PLC
Performance |
| Timeline |
| Home Depot |
| TOPPS TILES PLC |
Home Depot and TOPPS TILES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and TOPPS TILES
The main advantage of trading using opposite Home Depot and TOPPS TILES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, TOPPS TILES 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 TOPPS TILES will offset losses from the drop in TOPPS TILES's long position.| Home Depot vs. Charter Communications | Home Depot vs. COMBA TELECOM SYST | Home Depot vs. Consolidated Communications Holdings | Home Depot vs. Cogent Communications Holdings |
| TOPPS TILES vs. X FAB Silicon Foundries | TOPPS TILES vs. X FAB Silicon Foundries | TOPPS TILES vs. SEKISUI CHEMICAL | TOPPS TILES vs. Selective Insurance Group |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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