Correlation Between Sligro Food and Home Depot
Can any of the company-specific risk be diversified away by investing in both Sligro Food 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 Sligro Food and Home Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sligro Food Group and Home Depot, you can compare the effects of market volatilities on Sligro Food 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 Sligro Food with a short position of Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sligro Food and Home Depot.
Diversification Opportunities for Sligro Food and Home Depot
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sligro and Home is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot and Sligro Food 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 Sligro Food Group 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 Sligro Food i.e., Sligro Food and Home Depot go up and down completely randomly.
Pair Corralation between Sligro Food and Home Depot
Assuming the 90 days trading horizon Sligro Food is expected to generate 1.48 times less return on investment than Home Depot. In addition to that, Sligro Food is 2.95 times more volatile than Home Depot. It trades about 0.05 of its total potential returns per unit of risk. Home Depot is currently generating about 0.22 per unit of volatility. If you would invest 17,632 in Home Depot on September 24, 2024 and sell it today you would earn a total of 225.00 from holding Home Depot or generate 1.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.24% |
Values | Daily Returns |
Sligro Food Group vs. Home Depot
Performance |
Timeline |
Sligro Food Group |
Home Depot |
Sligro Food and Home Depot Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sligro Food and Home Depot
The main advantage of trading using opposite Sligro Food and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sligro Food 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.Sligro Food vs. Uniper SE | Sligro Food vs. Mulberry Group PLC | Sligro Food vs. London Security Plc | Sligro Food vs. Triad Group PLC |
Home Depot vs. Roebuck Food Group | Home Depot vs. Sligro Food Group | Home Depot vs. Zegona Communications Plc | Home Depot vs. Zoom Video Communications |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing |