Correlation Between Home Depot and Fidelity National
Can any of the company-specific risk be diversified away by investing in both Home Depot and Fidelity National 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 Fidelity National 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 Fidelity National Information, you can compare the effects of market volatilities on Home Depot and Fidelity National 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 Fidelity National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Fidelity National.
Diversification Opportunities for Home Depot and Fidelity National
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Home and Fidelity is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding The Home Depot and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National 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 Fidelity National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity National has no effect on the direction of Home Depot i.e., Home Depot and Fidelity National go up and down completely randomly.
Pair Corralation between Home Depot and Fidelity National
Assuming the 90 days trading horizon Home Depot is expected to generate 1.18 times less return on investment than Fidelity National. In addition to that, Home Depot is 1.2 times more volatile than Fidelity National Information. It trades about 0.09 of its total potential returns per unit of risk. Fidelity National Information is currently generating about 0.13 per unit of volatility. If you would invest 1,930 in Fidelity National Information on October 29, 2024 and sell it today you would earn a total of 1,002 from holding Fidelity National Information or generate 51.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
The Home Depot vs. Fidelity National Information
Performance |
| Timeline |
| Home Depot |
| Fidelity National |
Home Depot and Fidelity National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Fidelity National
The main advantage of trading using opposite Home Depot and Fidelity National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Fidelity National 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 Fidelity National will offset losses from the drop in Fidelity National's long position.| Home Depot vs. Teladoc Health | Home Depot vs. Patria Investments Limited | Home Depot vs. G2D Investments | Home Depot vs. CM Hospitalar SA |
| Fidelity National vs. METISA Metalrgica Timboense | Fidelity National vs. Costco Wholesale | Fidelity National vs. TAL Education Group | Fidelity National vs. Autohome |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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