Correlation Between HOME DEPOT and XXIX Metal

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

Diversification Opportunities for HOME DEPOT and XXIX Metal

-0.19

Correlation Coefficient

HOME DEPOT  XXIX Metal

Good diversification

The 3 months correlation between HOME and XXIX is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding HOME DEPOT CDR and XXIX Metal Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XXIX Metal Corp 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 XXIX Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XXIX Metal Corp has no effect on the direction of HOME DEPOT i.e., HOME DEPOT and XXIX Metal go up and down completely randomly.

Pair Corralation between HOME DEPOT and XXIX Metal

Assuming the 90 days trading horizon HOME DEPOT CDR is expected to generate 0.26 times more return on investment than XXIX Metal. However, HOME DEPOT CDR is 3.89 times less risky than XXIX Metal. It trades about 0.05 of its potential returns per unit of risk. XXIX Metal Corp is currently generating about 0.0 per unit of risk. If you would invest  2,017  in HOME DEPOT CDR on October 4, 2024 and sell it today you would earn a total of  487.00  from holding HOME DEPOT CDR or generate 24.14% 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.  XXIX Metal Corp

HOME DEPOT CDR

Risk-Adjusted Performance

0 of 100

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 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.

XXIX Metal Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XXIX Metal Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's forward indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with HOME DEPOT and XXIX Metal

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

The idea behind HOME DEPOT CDR and XXIX Metal Corp 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.