Correlation Between Home Depot and PENN Entertainment,
Can any of the company-specific risk be diversified away by investing in both Home Depot and PENN Entertainment, 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 PENN Entertainment, 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 PENN Entertainment,, you can compare the effects of market volatilities on Home Depot and PENN Entertainment, 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 PENN Entertainment,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and PENN Entertainment,.
Diversification Opportunities for Home Depot and PENN Entertainment,
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Home and PENN is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding The Home Depot and PENN Entertainment, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN Entertainment, 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 PENN Entertainment,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENN Entertainment, has no effect on the direction of Home Depot i.e., Home Depot and PENN Entertainment, go up and down completely randomly.
Pair Corralation between Home Depot and PENN Entertainment,
Assuming the 90 days trading horizon The Home Depot is expected to under-perform the PENN Entertainment,. In addition to that, Home Depot is 3.0 times more volatile than PENN Entertainment,. It trades about -0.24 of its total potential returns per unit of risk. PENN Entertainment, is currently generating about -0.32 per unit of volatility. If you would invest 1,211 in PENN Entertainment, on October 11, 2024 and sell it today you would lose (40.00) from holding PENN Entertainment, or give up 3.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Home Depot vs. PENN Entertainment,
Performance |
| Timeline |
| Home Depot |
| PENN Entertainment, |
Home Depot and PENN Entertainment, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and PENN Entertainment,
The main advantage of trading using opposite Home Depot and PENN Entertainment, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, PENN Entertainment, 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 PENN Entertainment, will offset losses from the drop in PENN Entertainment,'s long position.| Home Depot vs. Hormel Foods | Home Depot vs. Brpr Corporate Offices | Home Depot vs. Paycom Software | Home Depot vs. Palantir Technologies |
| PENN Entertainment, vs. Zoom Video Communications | PENN Entertainment, vs. Globus Medical, | PENN Entertainment, vs. ON Semiconductor | PENN Entertainment, vs. Charter Communications |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |