Correlation Between HOME DEPOT and Avricore Health

Can any of the company-specific risk be diversified away by investing in both HOME DEPOT and Avricore Health 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 HOME DEPOT and Avricore Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HOME DEPOT CDR and Avricore Health, you can compare the effects of market volatilities on HOME DEPOT and Avricore Health 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 HOME DEPOT with a short position of Avricore Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOME DEPOT and Avricore Health.

Diversification Opportunities for HOME DEPOT and Avricore Health

-0.17

Correlation Coefficient

HOME DEPOT  Avricore Health

Good diversification

The 3 months correlation between HOME and Avricore is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding HOME DEPOT CDR and Avricore Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avricore Health and HOME DEPOT 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 HOME DEPOT CDR are associated (or correlated) with Avricore Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avricore Health has no effect on the direction of HOME DEPOT i.e., HOME DEPOT and Avricore Health go up and down completely randomly.

Pair Corralation between HOME DEPOT and Avricore Health

Assuming the 90 days trading horizon HOME DEPOT CDR is expected to generate 0.19 times more return on investment than Avricore Health. However, HOME DEPOT CDR is 5.18 times less risky than Avricore Health. It trades about 0.2 of its potential returns per unit of risk. Avricore Health is currently generating about 0.03 per unit of risk. If you would invest  2,538  in HOME DEPOT CDR on October 25, 2024 and sell it today you would earn a total of  125.00  from holding HOME DEPOT CDR or generate 4.93% return on investment over 90 days.

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

HOME DEPOT CDR  vs.  Avricore Health

HOME DEPOT CDR

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in HOME DEPOT CDR are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, HOME DEPOT is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Avricore Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avricore Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with HOME DEPOT and Avricore Health

The main advantage of trading using opposite HOME DEPOT and Avricore Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOME DEPOT position performs unexpectedly, Avricore Health 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 Avricore Health will offset losses from the drop in Avricore Health's long position.

The idea behind HOME DEPOT CDR and Avricore Health 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.