Pair Correlation Between Alcoa and Best Buy

This module allows you to analyze existing cross correlation between Alcoa Inc and Best Buy Co Inc. You can compare the effects of market volatilities on Alcoa and Best Buy 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 Alcoa with a short position of Best Buy. See also your portfolio center. Please also check ongoing floating volatility patterns of Alcoa and Best Buy.
Investment Horizon     30 Days    Login   to change
Symbolsvs
 Alcoa Inc.  vs   Best Buy Co. Inc.
 Performance (%) 
      Timeline 

Pair Volatility

Allowing for the 30-days total investment horizon, Alcoa Inc is expected to under-perform the Best Buy. But the stock apears to be less risky and, when comparing its historical volatility, Alcoa Inc is 2.4 times less risky than Best Buy. The stock trades about -0.16 of its potential returns per unit of risk. The Best Buy Co Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  5,042  in Best Buy Co Inc on May 24, 2017 and sell it today you would earn a total of  476.00  from holding Best Buy Co Inc or generate 9.44% return on investment over 30 days.

Correlation Coefficient

Pair Corralation between Alcoa and Best Buy
0.52

Parameters

Time Period1 Month [change]
DirectionPositive 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Diversification

Very weak diversification

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

Comparative Volatility

 Predicted Return Density 
      Returns 

Alcoa Inc

  
0 

Risk-Adjusted Performance

Over the last 30 days Alcoa Inc has generated negative risk-adjusted returns adding no value to investors with long positions.

Best Buy Co

  
7 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Best Buy Co Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 30 days.