This module allows you to analyze existing cross correlation between Alcoa Corporation and The Home Depot Inc. You can compare the effects of market volatilities on Alcoa and Home Depot 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 Home Depot. See also your portfolio center
. Please also check ongoing floating volatility patterns of Alcoa
and Home Depot
Alcoa Corp. vs The Home Depot Inc
Allowing for the 30-days total investment horizon, Alcoa Corporation is expected to under-perform the Home Depot. In addition to that, Alcoa is 1.05 times more volatile than The Home Depot Inc. It trades about -0.25 of its total potential returns per unit of risk. The Home Depot Inc is currently generating about -0.17 per unit of volatility. If you would invest 20,537 in The Home Depot Inc on January 25, 2018 and sell it today you would lose (1,702) from holding The Home Depot Inc or give up 8.29% of portfolio value over 30 days.
|Time Period||1 Month [change]|
Almost no diversification
Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp. and The Home Depot Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on The Home Depot 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 Home Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Home Depot has no effect on the direction of Alcoa i.e. Alcoa and Home Depot go up and down completely randomly.
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 The Home Depot Inc has generated negative risk-adjusted returns adding no value to investors with long positions.