Correlation Between Beeks Trading and Home Depot
Can any of the company-specific risk be diversified away by investing in both Beeks Trading 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 Beeks Trading and Home Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beeks Trading and Home Depot, you can compare the effects of market volatilities on Beeks Trading 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 Beeks Trading with a short position of Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beeks Trading and Home Depot.
Diversification Opportunities for Beeks Trading and Home Depot
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Beeks and Home is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Beeks Trading and Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot and Beeks Trading 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 Beeks Trading 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 Beeks Trading i.e., Beeks Trading and Home Depot go up and down completely randomly.
Pair Corralation between Beeks Trading and Home Depot
If you would invest 26,700 in Beeks Trading on December 2, 2024 and sell it today you would earn a total of 2,000 from holding Beeks Trading or generate 7.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Beeks Trading vs. Home Depot
Performance |
Timeline |
Beeks Trading |
Home Depot |
Beeks Trading and Home Depot Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Beeks Trading and Home Depot
The main advantage of trading using opposite Beeks Trading and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beeks Trading 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.Beeks Trading vs. Spirent Communications plc | Beeks Trading vs. Charter Communications Cl | Beeks Trading vs. Arrow Electronics | Beeks Trading vs. Universal Music Group |
Home Depot vs. Virgin Wines UK | Home Depot vs. mobilezone holding AG | Home Depot vs. Batm Advanced Communications | Home Depot vs. Litigation Capital Management |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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