This module allows you to analyze existing cross correlation between The Home Depot Inc and Chevron Corporation. You can compare the effects of market volatilities on Home Depot and Chevron 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 Chevron. See also your portfolio center
. Please also check ongoing floating volatility patterns of Home Depot
The Home Depot Inc vs Chevron Corp.
Allowing for the 30-days total investment horizon, The Home Depot Inc is expected to generate 1.05 times more return on investment than Chevron. However, Home Depot is 1.05 times more volatile than Chevron Corporation. It trades about -0.24 of its potential returns per unit of risk. Chevron Corporation is currently generating about -0.41 per unit of risk. If you would invest 20,490 in The Home Depot Inc on January 23, 2018 and sell it today you would lose (2,184) from holding The Home Depot Inc or give up 10.66% of portfolio value over 30 days.
|Time Period||1 Month [change]|
Almost no diversification
Overlapping area represents the amount of risk that can be diversified away by holding The Home Depot Inc and Chevron Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Chevron 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 Inc are associated (or correlated) with Chevron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chevron has no effect on the direction of Home Depot i.e. Home Depot and Chevron go up and down completely randomly.
Over the last 30 days The Home Depot Inc has generated negative risk-adjusted returns adding no value to investors with long positions.
Over the last 30 days Chevron Corporation has generated negative risk-adjusted returns adding no value to investors with long positions.