This module allows you to analyze existing cross correlation between Best Buy Co and Home Depot. You can compare the effects of market volatilities on Best Buy 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 Best Buy with a short position of Home Depot. See also your portfolio center. Please also check ongoing floating volatility patterns of Best Buy and Home Depot.
|Horizon||30 Days Login to change|
Over the last 30 days Best Buy Co has generated negative risk-adjusted returns adding no value to investors with long positions. Inspite fairly strong basic indicators, Best Buy is not utilizing all of its potentials. The prevailing stock price disturbance, may contribute to short term losses for the investors.
Compared to the overall equity markets, risk-adjusted returns on investments in Home Depot are ranked lower than 10 (%) of all global equities and portfolios over the last 30 days. In spite of rather sluggish fundamental drivers, Home Depot exhibited solid returns over the last few months and may actually be approaching a breakup point.
Best Buy and Home Depot Volatility Contrast
Predicted Return Density
Best Buy Co Inc vs. Home Depot Inc
Considering 30-days investment horizon, Best Buy Co is expected to under-perform the Home Depot. In addition to that, Best Buy is 2.11 times more volatile than Home Depot. It trades about -0.03 of its total potential returns per unit of risk. Home Depot is currently generating about 0.16 per unit of volatility. If you would invest 21,000 in Home Depot on September 20, 2019 and sell it today you would earn a total of 2,793 from holding Home Depot or generate 13.3% return on investment over 30 days.
Pair Corralation between Best Buy and Home Depot
|Time Period||3 Months [change]|
Diversification Opportunities for Best Buy and Home Depot
Very good diversification
Overlapping area represents the amount of risk that can be diversified away by holding Best Buy Co 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 Best Buy 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 Best Buy Co 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 Best Buy i.e. Best Buy and Home Depot go up and down completely randomly.
See also your portfolio center. Please also try Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.