Correlation Between Home Depot and SOCGEN

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

By analyzing existing cross correlation between Home Depot and SOCGEN 425 19 AUG 26, you can compare the effects of market volatilities on Home Depot and SOCGEN 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 SOCGEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and SOCGEN.

Diversification Opportunities for Home Depot and SOCGEN

0.0

Correlation Coefficient

Home Depot  SOCGEN

Pay attention - limited upside

The 3 months correlation between Home and SOCGEN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and SOCGEN 425 19 AUG 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOCGEN 425 19 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 SOCGEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOCGEN 425 19 has no effect on the direction of Home Depot i.e., Home Depot and SOCGEN go up and down completely randomly.

Pair Corralation between Home Depot and SOCGEN

If you would invest (100.00) in SOCGEN 425 19 AUG 26 on December 30, 2024 and sell it today you would earn a total of  100.00  from holding SOCGEN 425 19 AUG 26 or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Home Depot  vs.  SOCGEN 425 19 AUG 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.

SOCGEN 425 19

Risk-Adjusted Performance

Strong

Over the last 90 days SOCGEN 425 19 AUG 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SOCGEN is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Home Depot and SOCGEN

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

The idea behind Home Depot and SOCGEN 425 19 AUG 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.