Pair Correlation Between Target and Home Depot

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

Pair Volatility

Considering 30-days investment horizon, Target Corporation is expected to generate 2.35 times more return on investment than Home Depot. However, Target is 2.35 times more volatile than The Home Depot Inc. It trades about 0.49 of its potential returns per unit of risk. The Home Depot Inc is currently generating about 0.46 per unit of risk. If you would invest  6,582  in Target Corporation on December 24, 2017 and sell it today you would earn a total of  1,276  from holding Target Corporation or generate 19.39% return on investment over 30 days.

Correlation Coefficient

Pair Corralation between Target and Home Depot
0.93

Parameters

Time Period1 Month [change]
DirectionPositive 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Diversification

Almost no diversification

Overlapping area represents the amount of risk that can be diversified away by holding Target 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 Target 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 Target 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 Target i.e. Target and Home Depot go up and down completely randomly.

Comparative Volatility

 Predicted Return Density 
      Returns 

Target

  
32 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Target Corporation are ranked lower than 32 (%) of all global equities and portfolios over the last 30 days.

The Home Depot

  
30 

Risk-Adjusted Performance

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