Correlation Between Bet At and Home Depot

Can any of the company-specific risk be diversified away by investing in both Bet At 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 Bet At and Home Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between bet at home AG and Home Depot, you can compare the effects of market volatilities on Bet At 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 Bet At with a short position of Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bet At and Home Depot.

Diversification Opportunities for Bet At and Home Depot

0.04

Correlation Coefficient

Bet At  Home Depot

Significant diversification

The 3 months correlation between Bet and Home is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding bet at home AG and Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot and Bet At 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 bet at home AG 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 Bet At i.e., Bet At and Home Depot go up and down completely randomly.

Pair Corralation between Bet At and Home Depot

Assuming the 90 days trading horizon bet at home AG is expected to generate 20.47 times more return on investment than Home Depot. However, Bet At is 20.47 times more volatile than Home Depot. It trades about 0.05 of its potential returns per unit of risk. Home Depot is currently generating about 0.13 per unit of risk. If you would invest  255.00  in bet at home AG on December 22, 2024 and sell it today you would earn a total of  18.00  from holding bet at home AG or generate 7.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

bet at home AG  vs.  Home Depot

bet at home

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in bet at home AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Bet At may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Home Depot

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Home Depot are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Home Depot is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bet At and Home Depot

The main advantage of trading using opposite Bet At and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bet At 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 bet at home AG 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.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.