Correlation Between Alcoa Corp and LOWES
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By analyzing existing cross correlation between Alcoa Corp and LOWES INC 405, you can compare the effects of market volatilities on Alcoa Corp and LOWES 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 Corp with a short position of LOWES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alcoa Corp and LOWES.
Diversification Opportunities for Alcoa Corp and LOWES
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alcoa and LOWES is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp and LOWES INC 405 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOWES INC 405 and Alcoa Corp 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 Corp are associated (or correlated) with LOWES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOWES INC 405 has no effect on the direction of Alcoa Corp i.e., Alcoa Corp and LOWES go up and down completely randomly.
Pair Corralation between Alcoa Corp and LOWES
Allowing for the 90-day total investment horizon Alcoa Corp is expected to generate 1.12 times more return on investment than LOWES. However, Alcoa Corp is 1.12 times more volatile than LOWES INC 405. It trades about 0.19 of its potential returns per unit of risk. LOWES INC 405 is currently generating about -0.16 per unit of risk. If you would invest 4,073 in Alcoa Corp on September 4, 2024 and sell it today you would earn a total of 497.00 from holding Alcoa Corp or generate 12.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Alcoa Corp vs. LOWES INC 405
Performance |
| Timeline |
| Alcoa Corp |
| LOWES INC 405 |
Alcoa Corp and LOWES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alcoa Corp and LOWES
The main advantage of trading using opposite Alcoa Corp and LOWES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcoa Corp position performs unexpectedly, LOWES can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in LOWES will offset losses from the drop in LOWES's long position.| Alcoa Corp vs. Constellium Nv | Alcoa Corp vs. Century Aluminum | Alcoa Corp vs. China Hongqiao Group | Alcoa Corp vs. Kaiser Aluminum |
| LOWES vs. Artisan Partners Asset | LOWES vs. BCB Bancorp | LOWES vs. Hudson Pacific Properties | LOWES vs. Mill City Ventures |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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