Pair Correlation Between Apple and Home Depot

This module allows you to analyze existing cross correlation between Apple Inc and The Home Depot Inc. You can compare the effects of market volatilities on Apple 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 Apple with a short position of Home Depot. See also your portfolio center. Please also check ongoing floating volatility patterns of Apple and Home Depot.
Investment Horizon     30 Days    Login   to change
Symbolsvs
 Apple Inc.  vs   The Home Depot Inc.
 Performance (%) 
Benchmark  Embed    Timeline 

Pair Volatility

Given the investment horizon of 30 days, Apple Inc is expected to under-perform the Home Depot. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 1.11 times less risky than Home Depot. The stock trades about -0.02 of its potential returns per unit of risk. The The Home Depot Inc is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest  14,704  in The Home Depot Inc on March 29, 2017 and sell it today you would earn a total of  908.00  from holding The Home Depot Inc or generate 6.18% return on investment over 30 days.

Correlation Coefficient

Pair Corralation between Apple and Home Depot
0.25

Parameters

Time Period1 Month [change]
DirectionPositive 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Diversification

Modest diversification

Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc. and The Home Depot Inc. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on The Home Depot and Apple 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 Apple Inc 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 The Home Depot has no effect on the direction of Apple i.e. Apple and Home Depot go up and down completely randomly.

Comparative Volatility

 Predicted Return Density 
Benchmark  Embed    Returns 

Apple Inc

  
0 

Risk-Adjusted Performance

Over the last 30 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions.

The Home Depot

  
31 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in The Home Depot Inc are ranked lower than 31 (%) of all global equities and portfolios over the last 30 days.