Correlation Between KSM Mutual and Home Depot
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By analyzing existing cross correlation between KSM Mutual Funds and Home Depot, you can compare the effects of market volatilities on KSM Mutual 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 KSM Mutual with a short position of Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of KSM Mutual and Home Depot.
Diversification Opportunities for KSM Mutual and Home Depot
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between KSM and Home is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding KSM Mutual Funds and Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot and KSM Mutual 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 KSM Mutual Funds 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 KSM Mutual i.e., KSM Mutual and Home Depot go up and down completely randomly.
Pair Corralation between KSM Mutual and Home Depot
Assuming the 90 days trading horizon KSM Mutual is expected to generate 10.18 times less return on investment than Home Depot. But when comparing it to its historical volatility, KSM Mutual Funds is 4.36 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 0.11 of returns per unit of risk over similar time horizon. If you would invest 28,281 in Home Depot on January 18, 2024 and sell it today you would earn a total of 5,202 from holding Home Depot or generate 18.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 81.3% |
| Values | Daily Returns |
KSM Mutual Funds vs. Home Depot
Performance |
| Timeline |
| KSM Mutual Funds |
| Home Depot |
KSM Mutual and Home Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KSM Mutual and Home Depot
The main advantage of trading using opposite KSM Mutual and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KSM Mutual 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.| KSM Mutual vs. KSM Mutual Funds | KSM Mutual vs. KSM Mutual Funds | KSM Mutual vs. KSM Mutual Funds | KSM Mutual vs. KSM Mutual Funds |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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