Correlation Analysis Between Apple and Home Depot

This module allows you to analyze existing cross correlation between Apple and Home Depot. You can compare the effects of market volatilities on Apple and Home Depot 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 Apple with a short position of Home Depot. See also your portfolio center. Please also check ongoing floating volatility patterns of Apple and Home Depot.
Horizon     30 Days    Login   to change
Symbolsvs
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Comparative Performance

Apple  
66

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Apple are ranked lower than 6 (%) of all global equities and portfolios over the last 30 days. Even with considerably conflicting technical indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in September 2019.
Home Depot  
00

Risk-Adjusted Performance

Over the last 30 days Home Depot has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Home Depot is not utilizing all of its potentials. The new stock price tumult, may contribute to shorter-term losses for the shareholders.

Apple and Home Depot Volatility Contrast

 Predicted Return Density 
      Returns 

Apple Inc  vs.  Home Depot Inc

 Performance (%) 
      Timeline 

Pair Volatility

Given the investment horizon of 30 days, Apple is expected to generate 1.45 times more return on investment than Home Depot. However, Apple is 1.45 times more volatile than Home Depot. It trades about 0.09 of its potential returns per unit of risk. Home Depot is currently generating about -0.03 per unit of risk. If you would invest  19,946  in Apple on July 20, 2019 and sell it today you would earn a total of  1,250  from holding Apple or generate 6.27% return on investment over 30 days.

Pair Corralation between Apple and Home Depot

0.62
Time Period2 Months [change]
DirectionPositive 
StrengthSignificant
Accuracy97.73%
ValuesDaily Returns

Diversification Opportunities for Apple and Home Depot

Apple Inc diversification synergy

Poor diversification

Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Home Depot Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Home Depot and Apple 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 Apple are associated (or correlated) with Home Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Depot has no effect on the direction of Apple i.e. Apple and Home Depot go up and down completely randomly.
See also your portfolio center. Please also try Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.


 
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