This module allows you to analyze existing cross correlation between Alcoa Corporation and The 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 somewhat strong basic indicators, Alcoa is not utilizing all of its potentials. The prevalent stock price disturbance, may contribute to short term losses for the investors.
Compared to the overall equity markets, risk-adjusted returns on investments in The Home Depot are ranked lower than 20 (%) of all global equities and portfolios over the last 30 days. In spite of rather sluggish fundamental drivers, Home Depot exhibited solid returns over the last few months and may actually be approaching a breakup point.
Alcoa and Home Depot Volatility Contrast
Predicted Return Density
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 2.12 times more volatile than The Home Depot. It trades about -0.02 of its total potential returns per unit of risk. The Home Depot is currently generating about 0.3 per unit of volatility. If you would invest 18,964 in The Home Depot on June 19, 2019 and sell it today you would earn a total of 2,480 from holding The Home Depot or generate 13.08% return on investment 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 The 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 Money Flow Index module to determine momentum by analyzing money flow index and other technical indicators.