Correlation Between CatalystTeza Algorithmic and Home Depot

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

Diversification Opportunities for CatalystTeza Algorithmic and Home Depot

-0.1
  Correlation Coefficient

Good diversification

The 3 months correlation between CatalystTeza and Home Depot is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding CatalystTeza Algorithmic Alloc and Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot and CatalystTeza Algorithmic 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 CatalystTeza Algorithmic Allocation 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 CatalystTeza Algorithmic i.e., CatalystTeza Algorithmic and Home Depot go up and down completely randomly.

Pair Corralation between CatalystTeza Algorithmic and Home Depot

If you would invest  27,973  in Home Depot on May 16, 2022 and sell it today you would earn a total of  3,516  from holding Home Depot or generate 12.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy69.05%
ValuesDaily Returns

CatalystTeza Algorithmic Alloc  vs.  Home Depot

 Performance (%) 
       Timeline  
CatalystTeza Algorithmic 
CatalystTeza Performance
0 of 100
Over the last 90 days CatalystTeza Algorithmic Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, CatalystTeza Algorithmic is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
Home Depot 
Home Depot Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Home Depot are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting fundamental indicators, Home Depot may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Home Depot Price Channel

CatalystTeza Algorithmic and Home Depot Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CatalystTeza Algorithmic and Home Depot

The main advantage of trading using opposite CatalystTeza Algorithmic and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CatalystTeza Algorithmic 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.

CatalystTeza Algorithmic Allocation

Pair trading matchups for CatalystTeza Algorithmic

The idea behind CatalystTeza Algorithmic Allocation and Home Depot 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.
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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