This module allows you to analyze existing cross correlation between The Home Depot Inc and Best Buy Co Inc. You can compare the effects of market volatilities on Home Depot and Best Buy 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 Best Buy. See also your portfolio center
. Please also check ongoing floating volatility patterns of Home Depot
and Best Buy
The Home Depot Inc vs Best Buy Co Inc
Allowing for the 30-days total investment horizon, The Home Depot Inc is expected to generate 0.17 times more return on investment than Best Buy. However, The Home Depot Inc is 6.03 times less risky than Best Buy. It trades about 0.49 of its potential returns per unit of risk. Best Buy Co Inc is currently generating about -0.08 per unit of risk. If you would invest 15,781 in The Home Depot Inc on September 17, 2017 and sell it today you would earn a total of 641 from holding The Home Depot Inc or generate 4.06% return on investment over 30 days.
|Time Period||1 Month [change]|
Very weak diversification
Overlapping area represents the amount of risk that can be diversified away by holding The Home Depot Inc and Best Buy Co Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Best Buy Co 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 The Home Depot Inc are associated (or correlated) with Best Buy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Best Buy Co has no effect on the direction of Home Depot i.e. Home Depot and Best Buy go up and down completely randomly.
Compared to the overall equity markets, risk-adjusted returns on investments in The Home Depot Inc are ranked lower than 33 (%) of all global equities and portfolios over the last 30 days.
Over the last 30 days Best Buy Co Inc has generated negative risk-adjusted returns adding no value to investors with long positions.