The Drivers Module shows relationships between Home Depot's most relevant fundamental drivers and provides multiple suggestions of what could possibly affect the performance of The Home Depot over time as well as its relative position and ranking within its peers. Please also check Risk vs Return Analysis
Home Depot Five Year Return vs. Beta Fundamental Analysis
The Home Depot is rated below average in beta category among related companies. It is rated below average in five year return category among related companies reporting about 1.27 of Five Year Return per Beta. Beta is one of the most important measures of equity market volatility. Beta can be thought of as asset elasticity or sensitivity to market. In other words, it is a number that shows the relationship of financial instrument to the financial market in which this instrument is traded. For example if Beta of equity is 2, it will be expected to significantly outperform market when market is going up and significantly underperform when market is going down. Similarly, Beta of 1 indicates that an asset and market will generate similar returns during over time.
|Five Year Return ( % )|
In a nutshell, Beta is a measure of individual stock risk relative to the overall volatility of the stock market. and is calculated based on very sound finance theory - Capital Assets Pricing Model (CAPM).However, since Beta is calculated based on historical price movements it may not predict how a firm's stock is going to perform in the future.Five Year Return is considered as one of the best measures to evaluate fund performance especially from the mid and long term prospective. It shows the total annualized return generated from holding a fund for the last 5 years and represents capital appreciation of fund investments including all dividends, losses, and capital gains distributions.
Although Five Year Fund Returns can give a sense of overall fund potential, it is recommended to compare fund performance with other similar funds for the same five year time interval. Similarly, comparing overall find performance over the last five year with appropriate market index is a great way to determine how this fund will perform during different market fluctuations.
Home Depot Five Year Return Comparison
Five Year Return
As market goes up, the company is expected to significantly outperform it. However, if the market returns are negative, Home Depot will likely underperform.