This module allows you to analyze existing cross correlation between Home Depot and Best Buy Co. 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.
|Horizon||30 Days Login to change|
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.
Over the last 30 days Best Buy Co has generated negative risk-adjusted returns adding no value to investors with long positions. Inspite fairly strong basic indicators, Best Buy is not utilizing all of its potentials. The prevailing stock price disturbance, may contribute to short term losses for the investors.
Home Depot and Best Buy Volatility Contrast
Predicted Return Density
Home Depot Inc vs. Best Buy Co Inc
Allowing for the 30-days total investment horizon, Home Depot is expected to under-perform the Best Buy. But the stock apears to be less risky and, when comparing its historical volatility, Home Depot is 2.29 times less risky than Best Buy. The stock trades about -0.07 of its potential returns per unit of risk. The Best Buy Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 6,839 in Best Buy Co on July 20, 2019 and sell it today you would lose (291.00) from holding Best Buy Co or give up 4.26% of portfolio value over 30 days.
Pair Corralation between Home Depot and Best Buy
|Time Period||2 Months [change]|
Diversification Opportunities for Home Depot and Best Buy
Very poor diversification
Overlapping area represents the amount of risk that can be diversified away by holding 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 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 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 has no effect on the direction of Home Depot i.e. Home Depot and Best Buy go up and down completely randomly.
See also your portfolio center. Please also try Theme Ratings module to determine theme ratings based on digital equity recommendations. macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.