Correlation Analysis Between Home Depot and American Airlines

This module allows you to analyze existing cross correlation between The Home Depot and American Airlines Group. You can compare the effects of market volatilities on Home Depot and American Airlines 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 American Airlines. See also your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and American Airlines.
Horizon     30 Days    Login   to change
Symbolsvs
Compare Efficiency

Comparative Performance

Home Depot  
0

Risk-Adjusted Performance

Over the last 30 days The Home Depot has generated negative risk-adjusted returns adding no value to investors with long positions.
American Airlines  
0

Risk-Adjusted Performance

Over the last 30 days American Airlines Group has generated negative risk-adjusted returns adding no value to investors with long positions.

Home Depot and American Airlines Volatility Contrast

 Predicted Return Density 
      Returns 

The Home Depot Inc  vs.  American Airlines Group Inc

 Performance (%) 
      Timeline 

Pair Volatility

Allowing for the 30-days total investment horizon, The Home Depot is expected to generate 0.53 times more return on investment than American Airlines. However, The Home Depot is 1.88 times less risky than American Airlines. It trades about 0.2 of its potential returns per unit of risk. American Airlines Group is currently generating about 0.08 per unit of risk. If you would invest  16,756  in The Home Depot on January 18, 2019 and sell it today you would earn a total of  2,483  from holding The Home Depot or generate 14.82% return on investment over 30 days.

Pair Corralation between Home Depot and American Airlines

0.81
Time Period2 Months [change]
DirectionPositive 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for Home Depot and American Airlines

The Home Depot Inc diversification synergy

Very poor diversification

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

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The Home Depot

Pair trading matchups for Home Depot

See also your portfolio center. Please also try Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.


 
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