Correlation Analysis Between Chevron and Home Depot

This module allows you to analyze existing cross correlation between Chevron Corporation and Home Depot. You can compare the effects of market volatilities on Chevron 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 Chevron with a short position of Home Depot. See also your portfolio center. Please also check ongoing floating volatility patterns of Chevron and Home Depot.
Horizon     30 Days    Login   to change
Symbolsvs
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Comparative Performance

Chevron  
00

Risk-Adjusted Performance

Over the last 30 days Chevron Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Inspite fairly strong basic indicators, Chevron is not utilizing all of its potentials. The ongoing stock price disturbance, may contribute to short term losses for the investors.
Home Depot  
88

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Home Depot are ranked lower than 8 (%) of all global equities and portfolios over the last 30 days. In spite of rather sluggish fundamental drivers, Home Depot may actually be approaching a critical reversion point that can send shares even higher in November 2019.

Chevron and Home Depot Volatility Contrast

 Predicted Return Density 
      Returns 

Chevron Corp.  vs.  Home Depot Inc

 Performance (%) 
      Timeline 

Pair Volatility

Considering 30-days investment horizon, Chevron Corporation is expected to under-perform the Home Depot. But the stock apears to be less risky and, when comparing its historical volatility, Chevron Corporation is 1.04 times less risky than Home Depot. The stock trades about -0.07 of its potential returns per unit of risk. The Home Depot is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  21,315  in Home Depot on September 16, 2019 and sell it today you would earn a total of  2,185  from holding Home Depot or generate 10.25% return on investment over 30 days.

Pair Corralation between Chevron and Home Depot

-0.1
Time Period3 Months [change]
DirectionNegative 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for Chevron and Home Depot

Chevron Corp. diversification synergy

Good diversification

Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp. and Home Depot Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Home Depot and Chevron 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 Chevron 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 Home Depot has no effect on the direction of Chevron i.e. Chevron and Home Depot go up and down completely randomly.
See also your portfolio center. Please also try Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.


 
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