Correlation Between PetroFrontier Corp and HOME DEPOT
Can any of the company-specific risk be diversified away by investing in both PetroFrontier Corp 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 PetroFrontier Corp and HOME DEPOT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PetroFrontier Corp and HOME DEPOT CDR, you can compare the effects of market volatilities on PetroFrontier Corp 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 PetroFrontier Corp with a short position of HOME DEPOT. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroFrontier Corp and HOME DEPOT.
Diversification Opportunities for PetroFrontier Corp and HOME DEPOT
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PetroFrontier and HOME is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding PetroFrontier Corp and HOME DEPOT CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOME DEPOT CDR and PetroFrontier Corp 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 PetroFrontier Corp 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 CDR has no effect on the direction of PetroFrontier Corp i.e., PetroFrontier Corp and HOME DEPOT go up and down completely randomly.
Pair Corralation between PetroFrontier Corp and HOME DEPOT
Assuming the 90 days horizon PetroFrontier Corp is expected to under-perform the HOME DEPOT. In addition to that, PetroFrontier Corp is 9.11 times more volatile than HOME DEPOT CDR. It trades about -0.03 of its total potential returns per unit of risk. HOME DEPOT CDR is currently generating about 0.14 per unit of volatility. If you would invest 2,628 in HOME DEPOT CDR on September 12, 2024 and sell it today you would earn a total of 97.00 from holding HOME DEPOT CDR or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetroFrontier Corp vs. HOME DEPOT CDR
Performance |
| Timeline |
| PetroFrontier Corp |
| HOME DEPOT CDR |
PetroFrontier Corp and HOME DEPOT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroFrontier Corp and HOME DEPOT
The main advantage of trading using opposite PetroFrontier Corp and HOME DEPOT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroFrontier Corp 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.| PetroFrontier Corp vs. TUT Fitness Group | PetroFrontier Corp vs. UnitedHealth Group CDR | PetroFrontier Corp vs. Nova Leap Health | PetroFrontier Corp vs. Economic Investment Trust |
| HOME DEPOT vs. Apple Inc CDR | HOME DEPOT vs. NVIDIA CDR | HOME DEPOT vs. Microsoft Corp CDR | HOME DEPOT vs. Amazon CDR |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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