Correlation Between Home Depot and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Home Depot and Fidelity Advisor 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 Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Fidelity Advisor 529, you can compare the effects of market volatilities on Home Depot and Fidelity Advisor 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 Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Fidelity Advisor.
Diversification Opportunities for Home Depot and Fidelity Advisor
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Home and Fidelity is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Fidelity Advisor 529 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor 529 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 Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor 529 has no effect on the direction of Home Depot i.e., Home Depot and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Home Depot and Fidelity Advisor
Allowing for the 90-day total investment horizon Home Depot is expected to generate 1.14 times less return on investment than Fidelity Advisor. In addition to that, Home Depot is 1.27 times more volatile than Fidelity Advisor 529. It trades about 0.14 of its total potential returns per unit of risk. Fidelity Advisor 529 is currently generating about 0.21 per unit of volatility. If you would invest 6,423 in Fidelity Advisor 529 on May 31, 2025 and sell it today you would earn a total of 894.00 from holding Fidelity Advisor 529 or generate 13.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Home Depot vs. Fidelity Advisor 529
Performance |
| Timeline |
| Home Depot |
| Fidelity Advisor 529 |
Home Depot and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Fidelity Advisor
The main advantage of trading using opposite Home Depot and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Fidelity Advisor 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 Fidelity Advisor will offset losses from the drop in Fidelity Advisor's long position.| Home Depot vs. Floor Decor Holdings | Home Depot vs. Arhaus Inc | Home Depot vs. Haverty Furniture Companies | Home Depot vs. Walmart |
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Check out your portfolio center.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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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