Correlation Analysis Between Home Depot and Alcoa

This module allows you to analyze existing cross correlation between The 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  
21

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in The Home Depot are ranked lower than 21 (%) of all global equities and portfolios over the last 30 days.
Alcoa  
12

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Alcoa Corporation are ranked lower than 12 (%) of all global equities and portfolios over the last 30 days.

Home Depot and Alcoa Volatility Contrast

 Predicted Return Density 
      Returns 

The Home Depot Inc  vs.  Alcoa Corp.

 Performance (%) 
      Timeline 

Pair Volatility

Allowing for the 30-days total investment horizon, Home Depot is expected to generate 1.17 times less return on investment than Alcoa. But when comparing it to its historical volatility, The Home Depot is 1.95 times less risky than Alcoa. It trades about 0.32 of its potential returns per unit of risk. Alcoa Corporation is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  2,391  in Alcoa Corporation on January 24, 2019 and sell it today you would earn a total of  626.00  from holding Alcoa Corporation or generate 26.18% return on investment over 30 days.

Pair Corralation between Home Depot and Alcoa

0.74
Time Period2 Months [change]
DirectionPositive 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for Home Depot and Alcoa

The Home Depot Inc diversification synergy

Poor diversification

Overlapping area represents the amount of risk that can be diversified away by holding The 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 The 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.

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