Correlation Between TESCO PLC and HomeToGo
Can any of the company-specific risk be diversified away by investing in both TESCO PLC and HomeToGo 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 TESCO PLC and HomeToGo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TESCO PLC ADR1 and HomeToGo SE, you can compare the effects of market volatilities on TESCO PLC and HomeToGo 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 TESCO PLC with a short position of HomeToGo. Check out your portfolio center. Please also check ongoing floating volatility patterns of TESCO PLC and HomeToGo.
Diversification Opportunities for TESCO PLC and HomeToGo
Excellent diversification
The 3 months correlation between TESCO and HomeToGo is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding TESCO PLC ADR1 and HomeToGo SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeToGo SE and TESCO PLC 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 TESCO PLC ADR1 are associated (or correlated) with HomeToGo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomeToGo SE has no effect on the direction of TESCO PLC i.e., TESCO PLC and HomeToGo go up and down completely randomly.
Pair Corralation between TESCO PLC and HomeToGo
Assuming the 90 days trading horizon TESCO PLC ADR1 is expected to generate 0.72 times more return on investment than HomeToGo. However, TESCO PLC ADR1 is 1.39 times less risky than HomeToGo. It trades about 0.07 of its potential returns per unit of risk. HomeToGo SE is currently generating about 0.03 per unit of risk. If you would invest 1,490 in TESCO PLC ADR1 on November 26, 2025 and sell it today you would earn a total of 150.00 from holding TESCO PLC ADR1 or generate 10.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.33% |
| Values | Daily Returns |
TESCO PLC ADR1 vs. HomeToGo SE
Performance |
| Timeline |
| TESCO PLC ADR1 |
| HomeToGo SE |
TESCO PLC and HomeToGo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TESCO PLC and HomeToGo
The main advantage of trading using opposite TESCO PLC and HomeToGo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TESCO PLC position performs unexpectedly, HomeToGo 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 HomeToGo will offset losses from the drop in HomeToGo's long position.| TESCO PLC vs. Treasure ASA | TESCO PLC vs. PT Bank Maybank | TESCO PLC vs. MOOG INC CL | TESCO PLC vs. Biotest Aktiengesellschaft |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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