Correlation Between Home Depot and Sadot

Can any of the company-specific risk be diversified away by investing in both Home Depot and Sadot at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Home Depot and Sadot into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Home Depot and Sadot Group, you can compare the effects of market volatilities on Home Depot and Sadot 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 Sadot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Sadot.

Diversification Opportunities for Home Depot and Sadot

-0.71

Correlation Coefficient

Home Depot  Sadot

Pay attention - limited upside

The 3 months correlation between Home and Sadot is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Sadot Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sadot Group 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 Home Depot are associated (or correlated) with Sadot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sadot Group has no effect on the direction of Home Depot i.e., Home Depot and Sadot go up and down completely randomly.

Pair Corralation between Home Depot and Sadot

Allowing for the 90-day total investment horizon Home Depot is expected to generate 0.15 times more return on investment than Sadot. However, Home Depot is 6.84 times less risky than Sadot. It trades about 0.1 of its potential returns per unit of risk. Sadot Group is currently generating about -0.01 per unit of risk. If you would invest  36,855  in Home Depot on May 21, 2025 and sell it today you would earn a total of  2,615  from holding Home Depot or generate 7.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Home Depot  vs.  Sadot Group

Home Depot

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Home Depot are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal fundamental indicators, Home Depot may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Sadot Group

Risk-Adjusted Performance

Weakest

Over the last 90 days Sadot Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Sadot is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Home Depot and Sadot

The main advantage of trading using opposite Home Depot and Sadot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Sadot can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sadot will offset losses from the drop in Sadot's long position.

The idea behind Home Depot and Sadot Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.