Correlation Between Storebrand Indeks and Home Depot
Can any of the company-specific risk be diversified away by investing in both Storebrand Indeks 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 Storebrand Indeks and Home Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Storebrand Indeks and Home Depot, you can compare the effects of market volatilities on Storebrand Indeks 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 Storebrand Indeks with a short position of Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Storebrand Indeks and Home Depot.
Diversification Opportunities for Storebrand Indeks and Home Depot
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Storebrand and Home is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Storebrand Indeks and Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot and Storebrand Indeks 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 Storebrand Indeks 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 Storebrand Indeks i.e., Storebrand Indeks and Home Depot go up and down completely randomly.
Pair Corralation between Storebrand Indeks and Home Depot
Assuming the 90 days trading horizon Storebrand Indeks is expected to generate 0.51 times more return on investment than Home Depot. However, Storebrand Indeks is 1.95 times less risky than Home Depot. It trades about 0.07 of its potential returns per unit of risk. Home Depot is currently generating about 0.04 per unit of risk. If you would invest 137,863 in Storebrand Indeks on January 25, 2024 and sell it today you would earn a total of 38,397 from holding Storebrand Indeks or generate 27.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.34% |
Values | Daily Returns |
Storebrand Indeks vs. Home Depot
Performance |
Timeline |
Storebrand Indeks |
Home Depot |
Storebrand Indeks and Home Depot Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Storebrand Indeks and Home Depot
The main advantage of trading using opposite Storebrand Indeks and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Storebrand Indeks 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.Storebrand Indeks vs. Novo Nordisk AS | Storebrand Indeks vs. Nordea Bank Abp | Storebrand Indeks vs. DSV Panalpina AS | Storebrand Indeks vs. AP Mller |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |