Correlation Analysis Between Lowes Companies and Home Depot

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

Comparative Performance

Lowes Companies  
1010

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Lowes Companies are ranked lower than 10 (%) of all global equities and portfolios over the last 30 days. Inspite fairly fragile primary indicators, Lowes Companies may actually be approaching a critical reversion point that can send shares even higher in February 2020.
Home Depot  
11

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Home Depot are ranked lower than 1 (%) of all global equities and portfolios over the last 30 days. In spite of rather sound fundamental drivers, Home Depot is not utilizing all of its potentials. The prevalent stock price tumult, may contribute to shorter-term losses for the shareholders.

Lowes Companies and Home Depot Volatility Contrast

 Predicted Return Density 
    
  Returns 

Lowes Companies Inc  vs.  Home Depot Inc

 Performance (%) 
    
  Timeline 

Pair Volatility

Considering 30-days investment horizon, Lowes Companies is expected to generate 0.9 times more return on investment than Home Depot. However, Lowes Companies is 1.11 times less risky than Home Depot. It trades about 0.16 of its potential returns per unit of risk. Home Depot is currently generating about 0.02 per unit of risk. If you would invest  11,087  in Lowes Companies on December 23, 2019 and sell it today you would earn a total of  1,163  from holding Lowes Companies or generate 10.49% return on investment over 30 days.

Pair Corralation between Lowes Companies and Home Depot

-0.61
Time Period3 Months [change]
DirectionNegative 
StrengthWeak
Accuracy96.88%
ValuesDaily Returns

Diversification Opportunities for Lowes Companies and Home Depot

Lowes Companies Inc diversification synergy

Excellent diversification

Overlapping area represents the amount of risk that can be diversified away by holding Lowes Companies 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 Lowes Companies 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 Lowes Companies 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 Lowes Companies i.e. Lowes Companies and Home Depot go up and down completely randomly.
See also your portfolio center. Please also try Balance Of Power module to check stock momentum by analyzing balance of power indicator and other technical ratios.