This module allows you to analyze existing cross correlation between The Home Depot and Apple. You can compare the effects of market volatilities on Home Depot and Apple 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 Apple. See also your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Apple.
Allowing for the 30-days total investment horizon, Home Depot is expected to generate 50.76 times less return on investment than Apple. But when comparing it to its historical volatility, The Home Depot is 1.47 times less risky than Apple. It trades about 0.01 of its potential returns per unit of risk. Apple is currently generating about 0.52 of returns per unit of risk over similar time horizon. If you would invest 16,232 in Apple on April 27, 2018 and sell it today you would earn a total of 2,626 from holding Apple or generate 16.18% return on investment over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding The Home Depot Inc and Apple Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Apple 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple has no effect on the direction of Home Depot i.e. Home Depot and Apple go up and down completely randomly.
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