This module allows you to analyze existing cross correlation between Best Buy Co Inc and The Home Depot Inc. You can compare the effects of market volatilities on Best Buy 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 Best Buy with a short position of Home Depot. See also your portfolio center
. Please also check ongoing floating volatility patterns of Best Buy
and Home Depot
Best Buy Co Inc vs The Home Depot Inc
Considering 30-days investment horizon, Best Buy Co Inc is expected to generate 1.04 times more return on investment than Home Depot. However, Best Buy is 1.04 times more volatile than The Home Depot Inc. It trades about -0.18 of its potential returns per unit of risk. The Home Depot Inc is currently generating about -0.24 per unit of risk. If you would invest 7,752 in Best Buy Co Inc on January 23, 2018 and sell it today you would lose (673.00) from holding Best Buy Co Inc or give up 8.68% of portfolio value over 30 days.
|Time Period||1 Month [change]|
Very poor diversification
Overlapping area represents the amount of risk that can be diversified away by holding Best Buy Co Inc and The Home Depot Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on The Home Depot and Best Buy 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 Best Buy Co Inc 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 The Home Depot has no effect on the direction of Best Buy i.e. Best Buy and Home Depot go up and down completely randomly.
Over the last 30 days Best Buy Co Inc has generated negative risk-adjusted returns adding no value to investors with long positions.
Over the last 30 days The Home Depot Inc has generated negative risk-adjusted returns adding no value to investors with long positions.