Correlation Between 548661EL7 and Home Depot
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By analyzing existing cross correlation between LOW 5 15 APR 33 and Home Depot, you can compare the effects of market volatilities on 548661EL7 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 548661EL7 with a short position of Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of 548661EL7 and Home Depot.
Diversification Opportunities for 548661EL7 and Home Depot
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 548661EL7 and Home is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding LOW 5 15 APR 33 and Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot and 548661EL7 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 LOW 5 15 APR 33 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 548661EL7 i.e., 548661EL7 and Home Depot go up and down completely randomly.
Pair Corralation between 548661EL7 and Home Depot
Assuming the 90 days trading horizon LOW 5 15 APR 33 is expected to under-perform the Home Depot. But the bond apears to be less risky and, when comparing its historical volatility, LOW 5 15 APR 33 is 1.66 times less risky than Home Depot. The bond trades about -0.2 of its potential returns per unit of risk. The Home Depot is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 39,350 in Home Depot on September 4, 2024 and sell it today you would earn a total of 3,346 from holding Home Depot or generate 8.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
LOW 5 15 APR 33 vs. Home Depot
Performance |
| Timeline |
| 548661EL7 |
| Home Depot |
548661EL7 and Home Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 548661EL7 and Home Depot
The main advantage of trading using opposite 548661EL7 and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 548661EL7 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.| 548661EL7 vs. AEP TEX INC | 548661EL7 vs. US BANK NATIONAL | 548661EL7 vs. MetLife | 548661EL7 vs. Brera Holdings PLC |
| Home Depot vs. Floor Decor Holdings | Home Depot vs. Arhaus Inc | Home Depot vs. Haverty Furniture Companies | Home Depot vs. Kirklands |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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