Pair Correlation Between Rite Aid and Home Depot

This module allows you to analyze existing cross correlation between Rite Aid Corporation and The Home Depot Inc. You can compare the effects of market volatilities on Rite Aid 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 Rite Aid with a short position of Home Depot. See also your portfolio center. Please also check ongoing floating volatility patterns of Rite Aid and Home Depot.
Investment Horizon     30 Days    Login   to change
Symbolsvs
 Rite Aid Corp.  vs   The Home Depot Inc
 Performance (%) 
      Timeline 

Pair Volatility

Considering 30-days investment horizon, Rite Aid Corporation is expected to generate 6.02 times more return on investment than Home Depot. However, Rite Aid is 6.02 times more volatile than The Home Depot Inc. It trades about 0.15 of its potential returns per unit of risk. The Home Depot Inc is currently generating about 0.45 per unit of risk. If you would invest  159  in Rite Aid Corporation on November 17, 2017 and sell it today you would earn a total of  26  from holding Rite Aid Corporation or generate 16.35% return on investment over 30 days.

Correlation Coefficient

Pair Corralation between Rite Aid and Home Depot
0.73

Parameters

Time Period1 Month [change]
DirectionPositive 
StrengthSignificant
Accuracy95.24%
ValuesDaily Returns

Diversification

Poor diversification

Overlapping area represents the amount of risk that can be diversified away by holding Rite Aid Corp. and The Home Depot Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on The Home Depot and Rite Aid 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 Rite Aid Corporation 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 The Home Depot has no effect on the direction of Rite Aid i.e. Rite Aid and Home Depot go up and down completely randomly.

Comparative Volatility

 Predicted Return Density 
      Returns 

Rite Aid

  
9 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Rite Aid Corporation are ranked lower than 9 (%) of all global equities and portfolios over the last 30 days.

The Home Depot

  
29 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in The Home Depot Inc are ranked lower than 29 (%) of all global equities and portfolios over the last 30 days.