Correlation Between HOME DEPOT and Enerplus

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Can any of the company-specific risk be diversified away by investing in both HOME DEPOT and Enerplus 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 HOME DEPOT and Enerplus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HOME DEPOT CDR and Enerplus, you can compare the effects of market volatilities on HOME DEPOT and Enerplus 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 Enerplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOME DEPOT and Enerplus.

Diversification Opportunities for HOME DEPOT and Enerplus

-0.76
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between HOME and Enerplus is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding HOME DEPOT CDR and Enerplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enerplus 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 CDR are associated (or correlated) with Enerplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enerplus has no effect on the direction of HOME DEPOT i.e., HOME DEPOT and Enerplus go up and down completely randomly.

Pair Corralation between HOME DEPOT and Enerplus

Assuming the 90 days trading horizon HOME DEPOT CDR is expected to under-perform the Enerplus. In addition to that, HOME DEPOT is 1.21 times more volatile than Enerplus. It trades about -0.12 of its total potential returns per unit of risk. Enerplus is currently generating about 0.01 per unit of volatility. If you would invest  2,678  in Enerplus on March 6, 2024 and sell it today you would earn a total of  0.00  from holding Enerplus or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

HOME DEPOT CDR  vs.  Enerplus

 Performance 
       Timeline  
HOME DEPOT CDR 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days HOME DEPOT CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in July 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.
Enerplus 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Enerplus are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal technical and fundamental indicators, Enerplus may actually be approaching a critical reversion point that can send shares even higher in July 2024.

HOME DEPOT and Enerplus Volatility Contrast

   Predicted Return Density   
       Returns