Correlation Between Home Depot and Anfield Dynamic

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Home Depot and Anfield Dynamic 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 Anfield Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Anfield Dynamic Fixed, you can compare the effects of market volatilities on Home Depot and Anfield Dynamic 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 Anfield Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Anfield Dynamic.

Diversification Opportunities for Home Depot and Anfield Dynamic

0.83
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Home Depot and Anfield is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Anfield Dynamic Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anfield Dynamic Fixed 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 Anfield Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anfield Dynamic Fixed has no effect on the direction of Home Depot i.e., Home Depot and Anfield Dynamic go up and down completely randomly.

Pair Corralation between Home Depot and Anfield Dynamic

Allowing for the 90-day total investment horizon Home Depot is expected to under-perform the Anfield Dynamic. In addition to that, Home Depot is 3.62 times more volatile than Anfield Dynamic Fixed. It trades about -0.15 of its total potential returns per unit of risk. Anfield Dynamic Fixed is currently generating about -0.31 per unit of volatility. If you would invest  873.00  in Anfield Dynamic Fixed on June 29, 2022 and sell it today you would lose (56.00)  from holding Anfield Dynamic Fixed or give up 6.41% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Home Depot  vs.  Anfield Dynamic Fixed

 Performance (%) 
       Timeline  
Home Depot 
Home Depot Performance
0 of 100
Over the last 90 days Home Depot has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Home Depot is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Home Depot Price Channel

Anfield Dynamic Fixed 
Anfield Performance
0 of 100
Over the last 90 days Anfield Dynamic Fixed has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Anfield Dynamic is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Anfield Price Channel

Home Depot and Anfield Dynamic Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Home Depot and Anfield Dynamic

The main advantage of trading using opposite Home Depot and Anfield Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Anfield Dynamic 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 Anfield Dynamic will offset losses from the drop in Anfield Dynamic's long position.
Home Depot vs. Kibush Capital Corp
The idea behind Home Depot and Anfield Dynamic Fixed pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Anfield Dynamic vs. Formula Folios Income
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 Probability Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

Other Complementary Tools

Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Go
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Go
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go