Correlation Between HOME DEPOT and Elixxer

Can any of the company-specific risk be diversified away by investing in both HOME DEPOT and Elixxer 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 Elixxer 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 Elixxer, you can compare the effects of market volatilities on HOME DEPOT and Elixxer 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 Elixxer. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOME DEPOT and Elixxer.

Diversification Opportunities for HOME DEPOT and Elixxer

0.0

Correlation Coefficient

HOME DEPOT  Elixxer

Pay attention - limited upside

The 3 months correlation between HOME and Elixxer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HOME DEPOT CDR and Elixxer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elixxer 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 Elixxer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elixxer has no effect on the direction of HOME DEPOT i.e., HOME DEPOT and Elixxer go up and down completely randomly.

Pair Corralation between HOME DEPOT and Elixxer

If you would invest  115.00  in Elixxer on December 21, 2024 and sell it today you would earn a total of  0.00  from holding Elixxer or generate 0.0% return on investment over 90 days.

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

HOME DEPOT CDR  vs.  Elixxer

HOME DEPOT CDR

Risk-Adjusted Performance

Very Weak

Over the last 90 days HOME DEPOT CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Elixxer

Risk-Adjusted Performance

Very Weak

Over the last 90 days Elixxer has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Elixxer is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with HOME DEPOT and Elixxer

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

The idea behind HOME DEPOT CDR and Elixxer 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.