Correlation Between HOME DEPOT and Cogeco Communications
Can any of the company-specific risk be diversified away by investing in both HOME DEPOT and Cogeco Communications 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 Cogeco Communications 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 Cogeco Communications, you can compare the effects of market volatilities on HOME DEPOT and Cogeco Communications 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 Cogeco Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOME DEPOT and Cogeco Communications.
Diversification Opportunities for HOME DEPOT and Cogeco Communications
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HOME and Cogeco is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding HOME DEPOT CDR and Cogeco Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogeco Communications 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 Cogeco Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogeco Communications has no effect on the direction of HOME DEPOT i.e., HOME DEPOT and Cogeco Communications go up and down completely randomly.
Pair Corralation between HOME DEPOT and Cogeco Communications
Assuming the 90 days trading horizon HOME DEPOT CDR is expected to generate 0.92 times more return on investment than Cogeco Communications. However, HOME DEPOT CDR is 1.08 times less risky than Cogeco Communications. It trades about 0.15 of its potential returns per unit of risk. Cogeco Communications is currently generating about 0.09 per unit of risk. If you would invest 2,447 in HOME DEPOT CDR on September 13, 2024 and sell it today you would earn a total of 275.00 from holding HOME DEPOT CDR or generate 11.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
HOME DEPOT CDR vs. Cogeco Communications
Performance |
Timeline |
HOME DEPOT CDR |
Cogeco Communications |
HOME DEPOT and Cogeco Communications Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with HOME DEPOT and Cogeco Communications
The main advantage of trading using opposite HOME DEPOT and Cogeco Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOME DEPOT position performs unexpectedly, Cogeco Communications 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 Cogeco Communications will offset losses from the drop in Cogeco Communications' long position.HOME DEPOT vs. Walmart Inc CDR | HOME DEPOT vs. Amazon CDR | HOME DEPOT vs. UPS CDR | HOME DEPOT vs. UnitedHealth Group CDR |
Cogeco Communications vs. UPS CDR | Cogeco Communications vs. HOME DEPOT CDR | Cogeco Communications vs. UnitedHealth Group CDR | Cogeco Communications vs. Costco Wholesale Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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