Correlation Between Lesico and Home Depot
Can any of the company-specific risk be diversified away by investing in both Lesico 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 Lesico and Home Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lesico and Home Depot, you can compare the effects of market volatilities on Lesico 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 Lesico with a short position of Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lesico and Home Depot.
Diversification Opportunities for Lesico and Home Depot
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lesico and Home is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Lesico and Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot and Lesico 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 Lesico 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 Lesico i.e., Lesico and Home Depot go up and down completely randomly.
Pair Corralation between Lesico and Home Depot
Assuming the 90 days trading horizon Lesico is expected to generate 1.92 times more return on investment than Home Depot. However, Lesico is 1.92 times more volatile than Home Depot. It trades about 0.26 of its potential returns per unit of risk. Home Depot is currently generating about -0.49 per unit of risk. If you would invest 30,450 in Lesico on January 25, 2024 and sell it today you would earn a total of 3,420 from holding Lesico or generate 11.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 77.27% |
| Values | Daily Returns |
Lesico vs. Home Depot
Performance |
| Timeline |
| Lesico |
| Home Depot |
Lesico and Home Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lesico and Home Depot
The main advantage of trading using opposite Lesico and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lesico 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.| Lesico vs. Alony Hetz Properties | Lesico vs. Melisron | Lesico vs. Shufersal | Lesico vs. Israel Discount Bank |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |