Correlation Between Home Depot and Southern Copper
Can any of the company-specific risk be diversified away by investing in both Home Depot and Southern Copper 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 Southern Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Home Depot and Southern Copper, you can compare the effects of market volatilities on Home Depot and Southern Copper 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 Southern Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Southern Copper.
Diversification Opportunities for Home Depot and Southern Copper
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Home and Southern is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding The Home Depot and Southern Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper 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 Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper has no effect on the direction of Home Depot i.e., Home Depot and Southern Copper go up and down completely randomly.
Pair Corralation between Home Depot and Southern Copper
Allowing for the 90-day total investment horizon The Home Depot is expected to under-perform the Southern Copper. But the stock apears to be less risky and, when comparing its historical volatility, The Home Depot is 1.89 times less risky than Southern Copper. The stock trades about -0.14 of its potential returns per unit of risk. The Southern Copper is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 9,533 in Southern Copper on August 28, 2025 and sell it today you would earn a total of 3,770 from holding Southern Copper or generate 39.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Home Depot vs. Southern Copper
Performance |
| Timeline |
| Home Depot |
| Southern Copper |
Home Depot and Southern Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Southern Copper
The main advantage of trading using opposite Home Depot and Southern Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot position performs unexpectedly, Southern Copper 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 Southern Copper will offset losses from the drop in Southern Copper's long position.| Home Depot vs. Floor Decor Holdings | Home Depot vs. Lowes Companies | Home Depot vs. HOME DEPOT CDR | Home Depot vs. GrowGeneration Corp |
| Southern Copper vs. ON Semiconductor | Southern Copper vs. GCT Semiconductor Holding | Southern Copper vs. 24SevenOffice Group AB | Southern Copper vs. Brookfield Office Properties |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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