Correlation Between Home Depot and MIZUHO

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

By analyzing existing cross correlation between Home Depot and MIZUHO 5535414 22 MAY 26, you can compare the effects of market volatilities on Home Depot and MIZUHO 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 MIZUHO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and MIZUHO.

Diversification Opportunities for Home Depot and MIZUHO

0.34

Correlation Coefficient

Home Depot  MIZUHO

Weak diversification

The 3 months correlation between Home and MIZUHO is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and MIZUHO 5535414 22 MAY 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIZUHO 5535414 22 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 MIZUHO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIZUHO 5535414 22 has no effect on the direction of Home Depot i.e., Home Depot and MIZUHO go up and down completely randomly.

Pair Corralation between Home Depot and MIZUHO

Allowing for the 90-day total investment horizon Home Depot is expected to under-perform the MIZUHO. In addition to that, Home Depot is 3.22 times more volatile than MIZUHO 5535414 22 MAY 26. It trades about -0.08 of its total potential returns per unit of risk. MIZUHO 5535414 22 MAY 26 is currently generating about -0.07 per unit of volatility. If you would invest  10,092  in MIZUHO 5535414 22 MAY 26 on December 30, 2024 and sell it today you would lose (106.00) from holding MIZUHO 5535414 22 MAY 26 or give up 1.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	53.23%
Values	Daily Returns

Home Depot  vs.  MIZUHO 5535414 22 MAY 26

Home Depot

Risk-Adjusted Performance

Very Weak

Over the last 90 days Home Depot has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

MIZUHO 5535414 22

Risk-Adjusted Performance

Very Weak

Over the last 90 days MIZUHO 5535414 22 MAY 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MIZUHO is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Home Depot and MIZUHO

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

The idea behind Home Depot and MIZUHO 5535414 22 MAY 26 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.