Correlation Between Mercantile Investment and Home Depot
Can any of the company-specific risk be diversified away by investing in both Mercantile Investment and Home Depot 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 Mercantile Investment and Home Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Mercantile Investment and Home Depot, you can compare the effects of market volatilities on Mercantile Investment and Home Depot 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 Mercantile Investment with a short position of Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercantile Investment and Home Depot.
Diversification Opportunities for Mercantile Investment and Home Depot
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mercantile and Home is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding The Mercantile Investment and Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot and Mercantile Investment 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 Mercantile Investment are associated (or correlated) with Home Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Depot has no effect on the direction of Mercantile Investment i.e., Mercantile Investment and Home Depot go up and down completely randomly.
Pair Corralation between Mercantile Investment and Home Depot
If you would invest 17,857 in Home Depot on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Home Depot or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Mercantile Investment vs. Home Depot
Performance |
| Timeline |
| The Mercantile Investment |
| Home Depot |
Mercantile Investment and Home Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercantile Investment and Home Depot
The main advantage of trading using opposite Mercantile Investment and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercantile Investment position performs unexpectedly, Home Depot 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 Home Depot will offset losses from the drop in Home Depot's long position.| Mercantile Investment vs. Catalyst Media Group | Mercantile Investment vs. Oncimmune Holdings plc | Mercantile Investment vs. Invesco Health Care | Mercantile Investment vs. Coor Service Management |
| Home Depot vs. Walmart | Home Depot vs. Volkswagen AG | Home Depot vs. Volkswagen AG Non Vtg | Home Depot vs. Compass Group PLC |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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