Pair Correlation Between Best Buy and Alcoa

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

Pair Volatility

Considering 30-days investment horizon, Best Buy is expected to generate 2.64 times less return on investment than Alcoa. But when comparing it to its historical volatility, Best Buy Co Inc is 1.88 times less risky than Alcoa. It trades about 0.42 of its potential returns per unit of risk. Alcoa Corporation is currently generating about 0.58 of returns per unit of risk over similar time horizon. If you would invest  4,457  in Alcoa Corporation on December 17, 2017 and sell it today you would earn a total of  1,187  from holding Alcoa Corporation or generate 26.63% return on investment over 30 days.

Correlation Coefficient

Pair Corralation between Best Buy and Alcoa
0.88

Parameters

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

Diversification

Very poor diversification

Overlapping area represents the amount of risk that can be diversified away by holding Best Buy Co Inc and Alcoa Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Alcoa and Best Buy 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 Best Buy Co Inc 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 Best Buy i.e. Best Buy and Alcoa go up and down completely randomly.

Comparative Volatility

 Predicted Return Density 
      Returns 

Best Buy Co

  
27 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Best Buy Co Inc are ranked lower than 27 (%) of all global equities and portfolios over the last 30 days.

Alcoa

  
38 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Alcoa Corporation are ranked lower than 38 (%) of all global equities and portfolios over the last 30 days.