This module allows you to analyze existing cross correlation between Best Buy Co and The Home Depot. 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.
|Horizon||30 Days Login to change|
Over the last 30 days Best Buy Co has generated negative risk-adjusted returns adding no value to investors with long positions. Inspite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in July 2019. The current disturbance may also be a sign of long term up-swing for the company investors.
Over the last 30 days The Home Depot has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Home Depot is not utilizing all of its potentials. The new stock price tumult, may contribute to shorter-term losses for the shareholders.
Best Buy and Home Depot Volatility Contrast
Predicted Return Density
Best Buy Co Inc vs. The Home Depot Inc
Considering 30-days investment horizon, Best Buy Co is expected to under-perform the Home Depot. In addition to that, Best Buy is 1.6 times more volatile than The Home Depot. It trades about -0.14 of its total potential returns per unit of risk. The Home Depot is currently generating about 0.01 per unit of volatility. If you would invest 20,492 in The Home Depot on May 16, 2019 and sell it today you would earn a total of 85.00 from holding The Home Depot or generate 0.41% return on investment over 30 days.
Pair Corralation between Best Buy and Home Depot
|Time Period||2 Months [change]|
Diversification Opportunities for Best Buy and Home Depot
Very weak 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 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 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 Best Buy i.e. Best Buy and Home Depot go up and down completely randomly.
See also your portfolio center. Please also try Focused Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.