Correlation Between BBLTB and Home Depot
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By analyzing existing cross correlation between BBLTB 3733 25 SEP 34 and Home Depot, you can compare the effects of market volatilities on BBLTB 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 BBLTB with a short position of Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of BBLTB and Home Depot.
Diversification Opportunities for BBLTB and Home Depot
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BBLTB and Home is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding BBLTB 3733 25 SEP 34 and Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot and BBLTB 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 BBLTB 3733 25 SEP 34 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 BBLTB i.e., BBLTB and Home Depot go up and down completely randomly.
Pair Corralation between BBLTB and Home Depot
Assuming the 90 days trading horizon BBLTB is expected to generate 9.39 times less return on investment than Home Depot. But when comparing it to its historical volatility, BBLTB 3733 25 SEP 34 is 1.36 times less risky than Home Depot. It trades about 0.01 of its potential returns per unit of risk. Home Depot is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 31,613 in Home Depot on September 3, 2024 and sell it today you would earn a total of 11,300 from holding Home Depot or generate 35.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 29.9% |
| Values | Daily Returns |
BBLTB 3733 25 SEP 34 vs. Home Depot
Performance |
| Timeline |
| BBLTB 3733 25 |
| Home Depot |
BBLTB and Home Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BBLTB and Home Depot
The main advantage of trading using opposite BBLTB and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BBLTB 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.The idea behind BBLTB 3733 25 SEP 34 and Home Depot pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Home Depot vs. Partner Communications | Home Depot vs. Merck Company | Home Depot vs. Western Midstream Partners | Home Depot vs. Edgewise Therapeutics |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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