Correlation Between First Trust and Home Depot
Can any of the company-specific risk be diversified away by investing in both First Trust 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 First Trust and Home Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust and Home Depot, you can compare the effects of market volatilities on First Trust 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 First Trust with a short position of Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Home Depot.
Diversification Opportunities for First Trust and Home Depot
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Home is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Trust and Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot and First Trust 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 First Trust 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 First Trust i.e., First Trust and Home Depot go up and down completely randomly.
Pair Corralation between First Trust and Home Depot
If you would invest (100.00) in First Trust on January 26, 2024 and sell it today you would earn a total of 100.00 from holding First Trust or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
First Trust vs. Home Depot
Performance |
| Timeline |
| First Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Home Depot |
First Trust and Home Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Home Depot
The main advantage of trading using opposite First Trust and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust 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.| First Trust vs. First Trust Exchange Traded | First Trust vs. First Trust Exchange Traded | First Trust vs. First Trust Dorsey | First Trust vs. First Trust Multi Asset |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| 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 | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |