Home Depot Correlations

HD Stock

USD 427.19 0.08 0.02%

The current 90-days correlation between Home Depot and Lowes Companies is 0.75 (i.e., Poor diversification). The correlation of Home Depot is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.

Home Depot Correlation With Market

Modest diversification

The correlation between Home Depot and DJI is 0.2 (i.e., Modest diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and DJI in the same portfolio, assuming nothing else is changed.

Check out Risk vs Return Analysis to better understand how to build diversified portfolios, which includes a position in Home Depot. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in unemployment.

For information on how to trade Home Stock refer to our How to Trade Home Stock guide.

Moving together with Home Stock

0.78	BQ	Boqii Holding Limited	Pair Corr
0.77	JD	JD Inc Adr Aggressive Push	Pair Corr
0.69	LB	LandBridge Company	Pair Corr
0.85	RH	RH Earnings Call This Week	Pair Corr
0.64	VIPS	Vipshop Holdings	Pair Corr
0.71	EBAY	eBay Inc	Pair Corr
0.68	WOOF	Pet Acquisition LLC Buyout Trend	Pair Corr
0.67	BBW	Build A Bear Earnings Call This Week	Pair Corr

Moving against Home Stock

0.66	FL	Foot Locker	Pair Corr
0.65	DIBS	1StdibsCom	Pair Corr
0.38	ETSY	Etsy Inc	Pair Corr
0.79	BGI	Birks Group	Pair Corr
0.67	CAL	Continental	Pair Corr
0.45	DKS	Dicks Sporting Goods	Pair Corr
0.38	DIT	AMCON Distributing	Pair Corr
0.36	AAP	Advance Auto Parts	Pair Corr
0.31	ASO	Academy Sports Outdoors Earnings Call Today	Pair Corr
0.31	AZI	Autozi Internet Tech	Pair Corr

Related Correlations Analysis

	FND	LL	ARHS	HVT	LOW	KIRK	TTSH	LIVE	HVT-A
FND		0.4	0.74	0.74	0.06	0.62	-0.04	0.48	-0.37	FND
LL	0.4		0.72	0.69	-0.59	0.13	-0.51	0.86	-0.19	LL
ARHS	0.74	0.72		0.83	-0.48	0.25	-0.36	0.82	-0.23	ARHS
HVT	0.74	0.69	0.83		-0.29	0.49	-0.37	0.77	-0.15	HVT
LOW	0.06	-0.59	-0.48	-0.29		0.55	0.7	-0.74	-0.15	LOW
KIRK	0.62	0.13	0.25	0.49	0.55		0.34	-0.01	-0.35	KIRK
TTSH	-0.04	-0.51	-0.36	-0.37	0.7	0.34		-0.64	-0.02	TTSH
LIVE	0.48	0.86	0.82	0.77	-0.74	-0.01	-0.64		-0.1	LIVE
HVT-A	-0.37	-0.19	-0.23	-0.15	-0.15	-0.35	-0.02	-0.1		HVT-A
	FND	LL	ARHS	HVT	LOW	KIRK	TTSH	LIVE	HVT-A

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Correlation Matchups

Over a given time period, the two securities move together when the Correlation Coefficient is positive. Conversely, the two assets move in opposite directions when the Correlation Coefficient is negative. Determining your positions' relationship to each other is valuable for analyzing and projecting your portfolio's future expected return and risk.

High positive correlations

LIVE	+ 0.86	LL
HVT	+ 0.83	ARHS
LIVE	+ 0.82	ARHS
LIVE	+ 0.77	HVT
ARHS	+ 0.74	FND
HVT	+ 0.74	FND

High negative correlations

LIVE	- 0.74	LOW
LIVE	- 0.64	TTSH
LOW	- 0.59	LL
TTSH	- 0.51	LL
LOW	- 0.48	ARHS
TTSH	- 0.37	HVT

Risk-Adjusted Indicators

There is a big difference between Home Stock performing well and Home Depot Company doing well as a business compared to the competition. There are so many exceptions to the norm that investors cannot definitively determine what's good or bad unless they analyze Home Depot's multiple risk-adjusted performance indicators across the competitive landscape. These indicators are quantitative in nature and help investors forecast volatility and risk-adjusted expected returns across various positions.

	Mean Deviation	Jensen Alpha	Sortino Ratio	Treynor Ratio	Semi Deviation	Expected Shortfall	Potential Upside	Value @Risk	Maximum Drawdown
FND	1.73	0.04	(0.02)	0.28	2.34	(1.75)	4.11	(3.94)	12.54
LL	6.54	(1.51)	0.00	0.78	0.00	0.00	10.29	(13.54)	124.24
ARHS	2.32	(0.48)	0.00	(0.17)	0.00	0.00	6.36	(5.79)	19.97
HVT	1.72	(0.33)	0.00	(0.13)	0.00	0.00	4.40	(3.17)	12.17
LOW	0.95	0.10	0.02	0.39	1.19	(1.00)	1.80	(1.70)	6.49
KIRK	3.16	(0.05)	0.01	0.09	3.26	(3.90)	6.06	(6.17)	22.39
TTSH	1.37	(0.02)	0.00	0.10	1.84	(1.54)	3.02	(3.00)	9.65
LIVE	2.49	(1.02)	0.00	(1.31)	0.00	0.00	5.90	(5.86)	14.89
HVT-A	1.62	(0.06)	(0.03)	(0.02)	2.43	(3.56)	4.90	(5.89)	18.61

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