Correlation Analysis Between DOW and Alcoa

This module allows you to analyze existing cross correlation between DOW and Alcoa Corporation. You can compare the effects of market volatilities on DOW and Alcoa 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 DOW with a short position of Alcoa. See also your portfolio center. Please also check ongoing floating volatility patterns of DOW and Alcoa.
Horizon     30 Days    Login   to change

DOW  vs.  Alcoa Corp.

 Performance (%) 

Pair Volatility

Given the investment horizon of 30 days, DOW is expected to generate 0.37 times more return on investment than Alcoa. However, DOW is 2.7 times less risky than Alcoa. It trades about -0.06 of its potential returns per unit of risk. Alcoa Corporation is currently generating about -0.12 per unit of risk. If you would invest  2,533,999  in DOW on November 13, 2018 and sell it today you would lose (81,272)  from holding DOW or give up 3.21% of portfolio value over 30 days.

Pair Corralation between DOW and Alcoa

Time Period2 Months [change]
ValuesDaily Returns


DOW diversification synergy

Very weak diversification

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

Comparative Volatility

 Predicted Return Density 

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See also your portfolio center. Please also try Aroon Oscillator module to analyze current equity momentum using aroon oscillator and other momentum ratios.