Correlation Analysis Between Lumber Liquidators and Home Depot

Analyzing existing cross correlation between Lumber Liquidators Holdings In and Home Depot. You can compare the effects of market volatilities on Lumber Liquidators 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 Lumber Liquidators with a short position of Home Depot. See also your portfolio center. Please also check ongoing floating volatility patterns of Lumber Liquidators and Home Depot.
Horizon     30 Days    Login   to change
Symbolsvs
Check Efficiency

Comparative Performance

Lumber Liquidators  
00

Risk-Adjusted Performance

Over the last 30 days Lumber Liquidators Holdings In has generated negative risk-adjusted returns adding no value to investors with long positions. Even with considerably steady technical indicators, Lumber Liquidators is not utilizing all of its potentials. The ongoing stock price chaos, may contribute to medium term losses for the stakeholders.
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.

Lumber Liquidators and Home Depot Volatility Contrast

 Predicted Return Density 
    
  Returns 

Lumber Liquidators Holdings In  vs.  Home Depot Inc

 Performance (%) 
    
  Timeline 

Pair Volatility

Allowing for the 30-days total investment horizon, Lumber Liquidators Holdings In is expected to generate 2.87 times more return on investment than Home Depot. However, Lumber Liquidators is 2.87 times more volatile than Home Depot. It trades about 0.0 of its potential returns per unit of risk. Home Depot is currently generating about -0.03 per unit of risk. If you would invest  965.00  in Lumber Liquidators Holdings In on December 21, 2019 and sell it today you would lose (30.00)  from holding Lumber Liquidators Holdings In or give up 3.11% of portfolio value over 30 days.

Pair Corralation between Lumber Liquidators and Home Depot

-0.17
Time Period3 Months [change]
DirectionNegative 
StrengthInsignificant
Accuracy98.41%
ValuesDaily Returns

Diversification Opportunities for Lumber Liquidators and Home Depot

Lumber Liquidators Holdings In diversification synergy

Good diversification

Overlapping area represents the amount of risk that can be diversified away by holding Lumber Liquidators Holdings In and Home Depot Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Home Depot and Lumber Liquidators 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 Lumber Liquidators Holdings In 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 Lumber Liquidators i.e. Lumber Liquidators and Home Depot go up and down completely randomly.
See also your portfolio center. Please also try Pair Correlation module to compare performance and examine historical correlation between any two equity instruments.