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.
Allowing for the 30-days total investment horizon, The Home Depot is expected to generate 0.42 times more return on investment than Best Buy. However, The Home Depot is 2.36 times less risky than Best Buy. It trades about -0.09 of its potential returns per unit of risk. Best Buy Co is currently generating about -0.05 per unit of risk. If you would invest 20,069 in The Home Depot on June 16, 2018 and sell it today you would lose (200.00) from holding The Home Depot or give up 1.0% of portfolio value over 30 days.
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 Co 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 Co 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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