Correlation Analysis Between Home Depot and BSE

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

 Predicted Return Density 
      Returns 

Home Depot Inc  vs.  BSE

 Performance (%) 
      Timeline 

Pair Volatility

Allowing for the 30-days total investment horizon, Home Depot is expected to generate 1.8 times more return on investment than BSE. However, Home Depot is 1.8 times more volatile than BSE. It trades about 0.07 of its potential returns per unit of risk. BSE is currently generating about -0.22 per unit of risk. If you would invest  20,642  in Home Depot on July 26, 2019 and sell it today you would earn a total of  750.00  from holding Home Depot or generate 3.63% return on investment over 30 days.

Pair Corralation between Home Depot and BSE

-0.06
Time Period2 Months [change]
DirectionNegative 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for Home Depot and BSE

Home Depot Inc diversification synergy

Good diversification

Overlapping area represents the amount of risk that can be diversified away by holding Home Depot Inc and BSE in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on BSE and Home Depot 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 Home Depot are associated (or correlated) with BSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BSE has no effect on the direction of Home Depot i.e. Home Depot and BSE go up and down completely randomly.
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