Correlation Between Home Depot and Hongkong
Can any of the company-specific risk be diversified away by investing in both Home Depot and Hongkong 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 Hongkong 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 The Hongkong and, you can compare the effects of market volatilities on Home Depot and Hongkong 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 Hongkong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Hongkong.
Diversification Opportunities for Home Depot and Hongkong
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Home and Hongkong is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding The Home Depot and The Hongkong and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hongkong 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 Hongkong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hongkong has no effect on the direction of Home Depot i.e., Home Depot and Hongkong go up and down completely randomly.
Pair Corralation between Home Depot and Hongkong
Assuming the 90 days trading horizon The Home Depot is expected to generate 1.02 times more return on investment than Hongkong. However, Home Depot is 1.02 times more volatile than The Hongkong and. It trades about 0.18 of its potential returns per unit of risk. The Hongkong and is currently generating about -0.23 per unit of risk. If you would invest 37,720 in The Home Depot on November 7, 2024 and sell it today you would earn a total of 1,730 from holding The Home Depot or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
The Home Depot vs. The Hongkong and
Performance |
| Timeline |
| Home Depot |
| The Hongkong |
Home Depot and Hongkong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Hongkong
The main advantage of trading using opposite Home Depot and Hongkong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Hongkong 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 Hongkong will offset losses from the drop in Hongkong's long position.| Home Depot vs. Silicon Motion Technology | Home Depot vs. Allegheny Technologies Incorporated | Home Depot vs. Sanyo Chemical Industries | Home Depot vs. ASPEN TECHINC DL |
| Hongkong vs. Marriott International | Hongkong vs. Hilton Worldwide Holdings | Hongkong vs. H World Group | Hongkong vs. Hyatt Hotels |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |