Correlation Analysis Between Home Depot and Alcoa |
This module allows you to analyze existing cross correlation between The Home Depot and Alcoa Corporation. 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.
| Horizon | 30 Days Login to change |
| Symbols | vs |
The Home Depot Inc vs. Alcoa Corp.
Pair Volatility
Allowing for the 30-days total investment horizon, The Home Depot is expected to under-perform the Alcoa. But the stock apears to be less risky and, when comparing its historical volatility, The Home Depot is 1.81 times less risky than Alcoa. The stock trades about -0.49 of its potential returns per unit of risk. The Alcoa Corporation is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 4,196 in Alcoa Corporation on September 22, 2018 and sell it today you would lose (291.00) from holding Alcoa Corporation or give up 6.94% of portfolio value over 30 days.
Pair Corralation between Home Depot and Alcoa
0.55
| Time Period | 1 Month [change] |
| Direction | Positive |
| Strength | Weak |
| Accuracy | 84.62% |
| Values | Daily Returns |
Diversification
Very weak diversification
Overlapping area represents the amount of risk that can be diversified away by holding The Home Depot Inc and Alcoa Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Alcoa 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 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 Home Depot i.e. Home Depot and Alcoa go up and down completely randomly.
Comparative Volatility
| The Home Depot |
0 Risk-Adjusted Performance
Risk-Adjusted PerformanceOver the last 30 days The Home Depot has generated negative risk-adjusted returns adding no value to investors with long positions.
The Home Depot
Pair trading matchups for Home Depot
| Alcoa |
0 Risk-Adjusted Performance
Risk-Adjusted PerformanceOver the last 30 days Alcoa Corporation has generated negative risk-adjusted returns adding no value to investors with long positions.
Alcoa Corporation
Pair trading matchups for Alcoa
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See also your portfolio center. Please also try Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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