This module allows you to analyze existing cross correlation between Home Depot and American Airlines Group. You can compare the effects of market volatilities on Home Depot and American Airlines 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 American Airlines. See also your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and American Airlines.
|Horizon||30 Days Login to change|
Compared to the overall equity markets, risk-adjusted returns on investments in Home Depot are ranked lower than 8 (%) of all global equities and portfolios over the last 30 days. In spite of rather fragile fundamental drivers, Home Depot may actually be approaching a critical reversion point that can send shares even higher in September 2019.
Over the last 30 days American Airlines Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with sluggish performance in the last few months, the Stock's technical indicators remain considerably steady which may send shares a bit higher in September 2019. The new chaos may also be a sign of medium term up-swing for the business stakeholders.
Home Depot and American Airlines Volatility Contrast
Predicted Return Density
Home Depot Inc vs. American Airlines Group Inc
Allowing for the 30-days total investment horizon, Home Depot is expected to generate 0.61 times more return on investment than American Airlines. However, Home Depot is 1.64 times less risky than American Airlines. It trades about 0.13 of its potential returns per unit of risk. American Airlines Group is currently generating about -0.18 per unit of risk. If you would invest 20,550 in Home Depot on July 23, 2019 and sell it today you would earn a total of 1,475 from holding Home Depot or generate 7.18% return on investment over 30 days.
Pair Corralation between Home Depot and American Airlines
|Time Period||2 Months [change]|
Diversification Opportunities for Home Depot and American Airlines
Very weak diversification
Overlapping area represents the amount of risk that can be diversified away by holding Home Depot Inc and American Airlines Group Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on American Airlines 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 American Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Airlines has no effect on the direction of Home Depot i.e. Home Depot and American Airlines go up and down completely randomly.
See also your portfolio center. Please also try Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.