Pair Correlation Between Home Depot and Alcoa

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

Pair Volatility

Allowing for the 30-days total investment horizon, The Home Depot Inc is expected to generate 0.24 times more return on investment than Alcoa. However, The Home Depot Inc is 4.24 times less risky than Alcoa. It trades about 0.13 of its potential returns per unit of risk. Alcoa Inc is currently generating about 0.01 per unit of risk. If you would invest  15,189  in The Home Depot Inc on April 24, 2017 and sell it today you would earn a total of  294.00  from holding The Home Depot Inc or generate 1.94% return on investment over 30 days.

Correlation Coefficient

Pair Corralation between Home Depot and Alcoa
-0.59

Parameters

Time Period1 Month [change]
DirectionNegative HD Moved Down vs AA
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Diversification

Excellent diversification

Overlapping area represents the amount of risk that can be diversified away by holding The Home Depot Inc. and Alcoa Inc. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Alcoa Inc 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 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 Inc has no effect on the direction of Home Depot i.e. Home Depot and Alcoa go up and down completely randomly.

Comparative Volatility

 Predicted Return Density 
      Returns 

The Home Depot

  
8 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in The Home Depot Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 30 days.

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.