Correlation Between Home Depot and BankFirst Capital
Can any of the company-specific risk be diversified away by investing in both Home Depot and BankFirst Capital 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 BankFirst Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and BankFirst Capital, you can compare the effects of market volatilities on Home Depot and BankFirst Capital 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 BankFirst Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and BankFirst Capital.
Diversification Opportunities for Home Depot and BankFirst Capital
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Home and BankFirst is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and BankFirst Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankFirst Capital 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 are associated (or correlated) with BankFirst Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankFirst Capital has no effect on the direction of Home Depot i.e., Home Depot and BankFirst Capital go up and down completely randomly.
Pair Corralation between Home Depot and BankFirst Capital
Allowing for the 90-day total investment horizon Home Depot is expected to under-perform the BankFirst Capital. In addition to that, Home Depot is 2.24 times more volatile than BankFirst Capital. It trades about -0.08 of its total potential returns per unit of risk. BankFirst Capital is currently generating about -0.03 per unit of volatility. If you would invest 4,050 in BankFirst Capital on December 27, 2024 and sell it today you would lose (50.00) from holding BankFirst Capital or give up 1.23% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Home Depot vs. BankFirst Capital
Performance |
Timeline |
Home Depot |
BankFirst Capital |
Home Depot and BankFirst Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Home Depot and BankFirst Capital
The main advantage of trading using opposite Home Depot and BankFirst Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, BankFirst Capital 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 BankFirst Capital will offset losses from the drop in BankFirst Capital's long position.Home Depot vs. Arhaus Inc | Home Depot vs. Haverty Furniture Companies | Home Depot vs. Kirklands | Home Depot vs. Live Ventures |
BankFirst Capital vs. Harbor Bankshares | BankFirst Capital vs. Citizens Bancshares Corp | BankFirst Capital vs. Security Federal | BankFirst Capital vs. MF Bancorp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Positions Ratings 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 | |
CEOs Directory Screen CEOs from public companies around the world | |
Stocks Directory Find actively traded stocks across global markets | |
Transaction History View history of all your transactions and understand their impact on performance |