This module allows you to analyze existing cross correlation between Alcoa Corporation and CVS Health Corporation. You can compare the effects of market volatilities on Alcoa and CVS Health 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 CVS Health. See also your portfolio center
. Please also check ongoing floating volatility patterns of Alcoa
and CVS Health
Over the last 30 days Alcoa Corporation has generated negative risk-adjusted returns adding no value to investors with long positions.
Over the last 30 days CVS Health Corporation has generated negative risk-adjusted returns adding no value to investors with long positions.
Alcoa and CVS Health Volatility Contrast
Alcoa Corp. vs. CVS Health Corp.
Allowing for the 30-days total investment horizon, Alcoa Corporation is expected to generate 1.52 times more return on investment than CVS Health. However, Alcoa is 1.52 times more volatile than CVS Health Corporation. It trades about 0.14 of its potential returns per unit of risk. CVS Health Corporation is currently generating about 0.04 per unit of risk. If you would invest 2,515 in Alcoa Corporation on January 21, 2019 and sell it today you would earn a total of 405.00 from holding Alcoa Corporation or generate 16.1% return on investment over 30 days.
Pair Corralation between Alcoa and CVS Health
|Time Period||2 Months [change]|
Diversification Opportunities for Alcoa and CVS Health
Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp. and CVS Health Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on CVS Health 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 Corporation are associated (or correlated) with CVS Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVS Health has no effect on the direction of Alcoa i.e. Alcoa and CVS Health go up and down completely randomly.