Correlation Between Triple Flag and HOME DEPOT
Can any of the company-specific risk be diversified away by investing in both Triple Flag 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 Triple Flag and HOME DEPOT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triple Flag Precious and HOME DEPOT CDR, you can compare the effects of market volatilities on Triple Flag 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 Triple Flag with a short position of HOME DEPOT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triple Flag and HOME DEPOT.
Diversification Opportunities for Triple Flag and HOME DEPOT
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Triple and HOME is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Triple Flag Precious 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 Triple Flag 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 Triple Flag Precious 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 Triple Flag i.e., Triple Flag and HOME DEPOT go up and down completely randomly.
Pair Corralation between Triple Flag and HOME DEPOT
Assuming the 90 days trading horizon Triple Flag Precious is expected to generate 1.4 times more return on investment than HOME DEPOT. However, Triple Flag is 1.4 times more volatile than HOME DEPOT CDR. It trades about 0.03 of its potential returns per unit of risk. HOME DEPOT CDR is currently generating about 0.05 per unit of risk. If you would invest 1,833 in Triple Flag Precious on October 26, 2024 and sell it today you would earn a total of 451.00 from holding Triple Flag Precious or generate 24.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Triple Flag Precious vs. HOME DEPOT CDR
Performance |
| Timeline |
| Triple Flag Precious |
| HOME DEPOT CDR |
Triple Flag and HOME DEPOT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triple Flag and HOME DEPOT
The main advantage of trading using opposite Triple Flag and HOME DEPOT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triple Flag 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.| Triple Flag vs. Rogers Communications | Triple Flag vs. Pembina Pipeline Corp | Triple Flag vs. AGF Management Limited | Triple Flag vs. Renoworks Software |
| HOME DEPOT vs. Quorum Information Technologies | HOME DEPOT vs. 2028 Investment Grade | HOME DEPOT vs. Overactive Media Corp | HOME DEPOT vs. AKITA Drilling |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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