Correlation Between Home Depot and XTANT MEDICAL
Can any of the company-specific risk be diversified away by investing in both Home Depot and XTANT MEDICAL 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 XTANT MEDICAL 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 XTANT MEDICAL HLDGS, you can compare the effects of market volatilities on Home Depot and XTANT MEDICAL 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 XTANT MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and XTANT MEDICAL.
Diversification Opportunities for Home Depot and XTANT MEDICAL
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Home and XTANT is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding The Home Depot and XTANT MEDICAL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XTANT MEDICAL HLDGS 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 XTANT MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XTANT MEDICAL HLDGS has no effect on the direction of Home Depot i.e., Home Depot and XTANT MEDICAL go up and down completely randomly.
Pair Corralation between Home Depot and XTANT MEDICAL
Assuming the 90 days trading horizon The Home Depot is expected to generate 0.23 times more return on investment than XTANT MEDICAL. However, The Home Depot is 4.37 times less risky than XTANT MEDICAL. It trades about 0.1 of its potential returns per unit of risk. XTANT MEDICAL HLDGS is currently generating about -0.01 per unit of risk. If you would invest 32,015 in The Home Depot on October 13, 2024 and sell it today you would earn a total of 6,080 from holding The Home Depot or generate 18.99% 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. XTANT MEDICAL HLDGS
Performance |
| Timeline |
| Home Depot |
| XTANT MEDICAL HLDGS |
Home Depot and XTANT MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and XTANT MEDICAL
The main advantage of trading using opposite Home Depot and XTANT MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, XTANT MEDICAL 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 XTANT MEDICAL will offset losses from the drop in XTANT MEDICAL's long position.| Home Depot vs. Superior Plus Corp | Home Depot vs. NMI Holdings | Home Depot vs. SIVERS SEMICONDUCTORS AB | Home Depot vs. Talanx AG |
| XTANT MEDICAL vs. Costco Wholesale Corp | XTANT MEDICAL vs. The Home Depot | XTANT MEDICAL vs. AEON STORES | XTANT MEDICAL vs. PICKN PAY STORES |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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