Correlation Analysis Between Home Depot and Best Buy

This module allows you to analyze existing cross correlation between The Home Depot and Best Buy Co. You can compare the effects of market volatilities on Home Depot and Best Buy 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 Best Buy. See also your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Best Buy.
Horizon     30 Days    Login   to change
Symbolsvs
Compare Efficiency

Comparative Performance

Home Depot  
0

Risk-Adjusted Performance

Over the last 30 days The Home Depot has generated negative risk-adjusted returns adding no value to investors with long positions.
Best Buy  
0

Risk-Adjusted Performance

Over the last 30 days Best Buy Co has generated negative risk-adjusted returns adding no value to investors with long positions.

Home Depot and Best Buy Volatility Contrast

 Predicted Return Density 
      Returns 

The Home Depot Inc  vs.  Best Buy Co Inc

 Performance (%) 
      Timeline 

Pair Volatility

Allowing for the 30-days total investment horizon, Home Depot is expected to generate 1.18 times less return on investment than Best Buy. But when comparing it to its historical volatility, The Home Depot is 1.16 times less risky than Best Buy. It trades about 0.31 of its potential returns per unit of risk. Best Buy Co is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  4,824  in Best Buy Co on January 21, 2019 and sell it today you would earn a total of  1,217  from holding Best Buy Co or generate 25.23% return on investment over 30 days.

Pair Corralation between Home Depot and Best Buy

0.87
Time Period2 Months [change]
DirectionPositive 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for Home Depot and Best Buy

The Home Depot Inc diversification synergy

Very poor diversification

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

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See also your portfolio center. Please also try Balance Of Power module to check stock momentum by analyzing balance of power indicator and other technical ratios.


 
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