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
 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 generate 1.14 times more return on investment than Home Depot. However, Apple is 1.14 times more volatile than The Home Depot Inc. It trades about 0.2 of its potential returns per unit of risk. The Home Depot Inc is currently generating about 0.16 per unit of risk. If you would invest  13,653  in Apple Inc on February 23, 2017 and sell it today you would earn a total of  413.08  from holding Apple Inc or generate 3.03% return on investment over 30 days.
Correlation Coefficient
Pair Corralation between Apple and Home Depot
0.77

Parameters

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

Diversification

Poor 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

  
13 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 30 days.

The Home Depot

  
10 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in The Home Depot Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 30 days.