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
Over the last 30 days The Home Depot has generated negative risk-adjusted returns adding no value to investors with long positions.
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
The Home Depot Inc vs. American Airlines Group Inc
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
|Time Period||2 Months [change]|
Diversification Opportunities for Home Depot and American Airlines
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.