Pair Correlation Between Home Depot and Best Buy

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

Pair Volatility

Allowing for the 30-days total investment horizon, Home Depot is expected to generate 3.03 times less return on investment than Best Buy. But when comparing it to its historical volatility, The Home Depot Inc is 1.75 times less risky than Best Buy. It trades about 0.3 of its potential returns per unit of risk. Best Buy Co Inc is currently generating about 0.51 of returns per unit of risk over similar time horizon. If you would invest  4,620  in Best Buy Co Inc on March 26, 2017 and sell it today you would earn a total of  495.00  from holding Best Buy Co Inc or generate 10.71% return on investment over 30 days.

Correlation Coefficient

Pair Corralation between Home Depot and Best Buy
0.45

Parameters

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

Diversification

Very weak diversification

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

Comparative Volatility

 Predicted Return Density 
Benchmark  Embed    Returns 

The Home Depot

  
20 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in The Home Depot Inc are ranked lower than 20 (%) of all global equities and portfolios over the last 30 days.

Best Buy Co

  
35 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Best Buy Co Inc are ranked lower than 35 (%) of all global equities and portfolios over the last 30 days.