Correlation Between Costco Wholesale and Alstria Office
Can any of the company-specific risk be diversified away by investing in both Costco Wholesale and Alstria Office at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Costco Wholesale and Alstria Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Costco Wholesale Corp and alstria office REIT AG, you can compare the effects of market volatilities on Costco Wholesale and Alstria Office 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 Costco Wholesale with a short position of Alstria Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costco Wholesale and Alstria Office.
Diversification Opportunities for Costco Wholesale and Alstria Office
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Costco and Alstria is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale Corp and alstria office REIT AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on alstria office REIT and Costco Wholesale 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 Costco Wholesale Corp are associated (or correlated) with Alstria Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of alstria office REIT has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and Alstria Office go up and down completely randomly.
Pair Corralation between Costco Wholesale and Alstria Office
Assuming the 90 days trading horizon Costco Wholesale Corp is expected to under-perform the Alstria Office. But the stock apears to be less risky and, when comparing its historical volatility, Costco Wholesale Corp is 2.66 times less risky than Alstria Office. The stock trades about -0.38 of its potential returns per unit of risk. The alstria office REIT AG is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 461.00 in alstria office REIT AG on October 12, 2024 and sell it today you would earn a total of 76.00 from holding alstria office REIT AG or generate 16.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Costco Wholesale Corp vs. alstria office REIT AG
Performance |
| Timeline |
| Costco Wholesale Corp |
| alstria office REIT |
Costco Wholesale and Alstria Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costco Wholesale and Alstria Office
The main advantage of trading using opposite Costco Wholesale and Alstria Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, Alstria Office 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 Alstria Office will offset losses from the drop in Alstria Office's long position.| Costco Wholesale vs. Home Depot | Costco Wholesale vs. alstria office REIT AG | Costco Wholesale vs. BE Semiconductor Industries | Costco Wholesale vs. Nordic Semiconductor ASA |
| Alstria Office vs. Spire Healthcare Group | Alstria Office vs. British American Tobacco | Alstria Office vs. Costco Wholesale Corp | Alstria Office vs. HCA Healthcare |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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