Correlation Analysis Between Home Depot and Alcoa

This module allows you to analyze existing cross correlation between 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
Symbolsvs
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Comparative Performance

Home Depot  
00

Risk-Adjusted Performance

Over the last 30 days Home Depot has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest sluggish performance, the Stock's fundamental drivers remain sound and the ongoing tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.
Alcoa  
00

Risk-Adjusted Performance

Over the last 30 days Alcoa Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Alcoa is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short term losses for the investors.

Home Depot and Alcoa Volatility Contrast

 Predicted Return Density 
      Returns 

Home Depot Inc  vs.  Alcoa Corp.

 Performance (%) 
      Timeline 

Pair Volatility

Allowing for the 30-days total investment horizon, Home Depot is expected to under-perform the Alcoa. But the stock apears to be less risky and, when comparing its historical volatility, Home Depot is 2.49 times less risky than Alcoa. The stock trades about -0.11 of its potential returns per unit of risk. The Alcoa Corporation is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,083  in Alcoa Corporation on November 9, 2019 and sell it today you would lose (23.00)  from holding Alcoa Corporation or give up 1.1% of portfolio value over 30 days.

Pair Corralation between Home Depot and Alcoa

0.3
Time Period3 Months [change]
DirectionPositive 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for Home Depot and Alcoa

Home Depot Inc diversification synergy

Weak diversification

Overlapping area represents the amount of risk that can be diversified away by holding 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 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.
See also your portfolio center. Please also try Chance of Distress module to get analysis of equity chance of financial distress in the next 2 years.


 
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