This module allows you to analyze existing cross correlation between Alcoa Corporation and Home Depot. 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.
|Horizon||30 Days Login to change|
Over the last 30 days Alcoa Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in September 2019. The current disturbance may also be a sign of long term up-swing for the company investors.
Over the last 30 days Home Depot has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Home Depot is not utilizing all of its potentials. The new stock price tumult, may contribute to shorter-term losses for the shareholders.
Alcoa and Home Depot Volatility Contrast
Predicted Return Density
Alcoa Corp. vs. 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 2.23 times more volatile than Home Depot. It trades about -0.17 of its total potential returns per unit of risk. Home Depot is currently generating about -0.02 per unit of volatility. If you would invest 21,125 in Home Depot on July 20, 2019 and sell it today you would lose (330.00) from holding Home Depot or give up 1.56% of portfolio value over 30 days.
Pair Corralation between Alcoa and Home Depot
|Time Period||2 Months [change]|
Diversification Opportunities for Alcoa and Home Depot
Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp. and Home Depot Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on 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 Home Depot has no effect on the direction of Alcoa i.e. Alcoa and Home Depot go up and down completely randomly.
See also your portfolio center. Please also try Price Ceiling Movement module to calculate and plot price ceiling movement for different equity instruments.