Correlation Between Kardan Israel and Home Depot
Can any of the company-specific risk be diversified away by investing in both Kardan Israel and Home Depot at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kardan Israel and Home Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kardan Israel and Home Depot, you can compare the effects of market volatilities on Kardan Israel 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 Kardan Israel with a short position of Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kardan Israel and Home Depot.
Diversification Opportunities for Kardan Israel and Home Depot
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kardan and Home is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Kardan Israel and Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot and Kardan Israel 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 Kardan Israel 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 Kardan Israel i.e., Kardan Israel and Home Depot go up and down completely randomly.
Pair Corralation between Kardan Israel and Home Depot
Assuming the 90 days trading horizon Kardan Israel is expected to generate 0.9 times more return on investment than Home Depot. However, Kardan Israel is 1.12 times less risky than Home Depot. It trades about -0.05 of its potential returns per unit of risk. Home Depot is currently generating about -0.4 per unit of risk. If you would invest 22,300 in Kardan Israel on January 19, 2024 and sell it today you would lose (300.00) from holding Kardan Israel or give up 1.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Kardan Israel vs. Home Depot
Performance |
| Timeline |
| Kardan Israel |
| Home Depot |
Kardan Israel and Home Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kardan Israel and Home Depot
The main advantage of trading using opposite Kardan Israel and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kardan Israel position performs unexpectedly, Home Depot can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Home Depot will offset losses from the drop in Home Depot's long position.| Kardan Israel vs. MEITAV INVESTMENTS HOUSE | Kardan Israel vs. Isras Investment | Kardan Israel vs. IDI Insurance | Kardan Israel vs. Meitav Dash Investments |
| Home Depot vs. Floor Decor Holdings | Home Depot vs. LL Flooring Holdings | Home Depot vs. Arhaus Inc | Home Depot vs. Haverty Furniture Companies |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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