Correlation Between Home Depot and ATT

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Home Depot and ATT 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 Home Depot and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and ATT Inc, you can compare the effects of market volatilities on Home Depot and ATT 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 ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and ATT.

Diversification Opportunities for Home Depot and ATT

0.25
  Correlation Coefficient

Modest diversification

The 3 months correlation between Home and ATT is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc 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 Home Depot are associated (or correlated) with ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Home Depot i.e., Home Depot and ATT go up and down completely randomly.

Pair Corralation between Home Depot and ATT

Allowing for the 90-day total investment horizon Home Depot is expected to generate 1.6 times less return on investment than ATT. In addition to that, Home Depot is 1.25 times more volatile than ATT Inc. It trades about 0.11 of its total potential returns per unit of risk. ATT Inc is currently generating about 0.21 per unit of volatility. If you would invest  1,683  in ATT Inc on December 29, 2023 and sell it today you would earn a total of  77.00  from holding ATT Inc or generate 4.58% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Home Depot  vs.  ATT Inc

 Performance 
       Timeline  
Home Depot 

Risk-Adjusted Performance

12 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Home Depot are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Home Depot may actually be approaching a critical reversion point that can send shares even higher in April 2024.
ATT Inc 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, ATT may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Home Depot and ATT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Home Depot and ATT

The main advantage of trading using opposite Home Depot and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.
The idea behind Home Depot and ATT Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

Other Complementary Tools

Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Global Correlations
Find global opportunities by holding instruments from different markets
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio