Correlation Between Home Depot and AutoNation

Analyzing existing cross correlation between Home Depot and AutoNation. You can compare the effects of market volatilities on Home Depot and AutoNation 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 AutoNation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and AutoNation.

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Diversification Opportunities for Home Depot and AutoNation

Home Depot Inc diversification synergy
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Almost no diversification

The 3 months correlation between Home Depot and AutoNation is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot Inc and AutoNation Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on AutoNation 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 AutoNation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AutoNation has no effect on the direction of Home Depot i.e. Home Depot and AutoNation go up and down completely randomly.

Pair Corralation between Home Depot and AutoNation

Allowing for the 30-days total investment horizon, Home Depot is expected to generate 0.87 times more return on investment than AutoNation. However, Home Depot is 1.16 times less risky than AutoNation. It trades about -0.01 of its potential returns per unit of risk. AutoNation is currently generating about -0.06 per unit of risk. If you would invest  22,334  in Home Depot on March 11, 2020 and sell it today you would lose (2,181)  from holding Home Depot or give up 9.77% of portfolio value over 30 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
ValuesDaily Returns

Home Depot Inc  vs.  AutoNation Inc

 Performance (%) 
Home Depot 

Home Depot 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.

AutoNation Risk-Adjusted Performance

Over the last 30 days AutoNation has generated negative risk-adjusted returns adding no value to investors with long positions. Allthough unsteady performance in the last few months, the Stock's forward indicators remain quite persistent which may send shares a bit higher in May 2020. The existing mess may also be a sign of long standing up-swing for the corporation partners.

Home Depot and AutoNation Volatility Contrast

 Predicted Return Density 
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