Correlation Between Costco Wholesale and Canadian General
Can any of the company-specific risk be diversified away by investing in both Costco Wholesale and Canadian General 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 Canadian General 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 Canadian General Investments, you can compare the effects of market volatilities on Costco Wholesale and Canadian General 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 Canadian General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costco Wholesale and Canadian General.
Diversification Opportunities for Costco Wholesale and Canadian General
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Costco and Canadian is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale Corp and Canadian General Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian General Inv 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 Canadian General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian General Inv has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and Canadian General go up and down completely randomly.
Pair Corralation between Costco Wholesale and Canadian General
Assuming the 90 days trading horizon Costco Wholesale Corp is expected to generate 0.47 times more return on investment than Canadian General. However, Costco Wholesale Corp is 2.14 times less risky than Canadian General. It trades about 0.24 of its potential returns per unit of risk. Canadian General Investments is currently generating about 0.08 per unit of risk. If you would invest 91,498 in Costco Wholesale Corp on November 1, 2024 and sell it today you would earn a total of 4,571 from holding Costco Wholesale Corp or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Costco Wholesale Corp vs. Canadian General Investments
Performance |
| Timeline |
| Costco Wholesale Corp |
| Canadian General Inv |
Costco Wholesale and Canadian General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costco Wholesale and Canadian General
The main advantage of trading using opposite Costco Wholesale and Canadian General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, Canadian General 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 Canadian General will offset losses from the drop in Canadian General's long position.| Costco Wholesale vs. URU Metals | Costco Wholesale vs. Pets at Home | Costco Wholesale vs. Coeur Mining | Costco Wholesale vs. Adriatic Metals |
| Canadian General vs. Costco Wholesale Corp | Canadian General vs. Indutrade AB | Canadian General vs. Ondine Biomedical | Canadian General vs. National Beverage Corp |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |