Correlation Between Costco Wholesale and Polar Capital
Can any of the company-specific risk be diversified away by investing in both Costco Wholesale and Polar Capital 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 Polar Capital 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 Polar Capital Technology, you can compare the effects of market volatilities on Costco Wholesale and Polar Capital 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 Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costco Wholesale and Polar Capital.
Diversification Opportunities for Costco Wholesale and Polar Capital
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Costco and Polar is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale Corp and Polar Capital Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polar Capital Technology 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 Polar Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polar Capital Technology has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and Polar Capital go up and down completely randomly.
Pair Corralation between Costco Wholesale and Polar Capital
Assuming the 90 days trading horizon Costco Wholesale Corp is expected to generate 14.52 times more return on investment than Polar Capital. However, Costco Wholesale is 14.52 times more volatile than Polar Capital Technology. It trades about 0.04 of its potential returns per unit of risk. Polar Capital Technology is currently generating about 0.1 per unit of risk. If you would invest 48,753 in Costco Wholesale Corp on November 2, 2024 and sell it today you would earn a total of 49,228 from holding Costco Wholesale Corp or generate 100.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Costco Wholesale Corp vs. Polar Capital Technology
Performance |
| Timeline |
| Costco Wholesale Corp |
| Polar Capital Technology |
Costco Wholesale and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costco Wholesale and Polar Capital
The main advantage of trading using opposite Costco Wholesale and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, Polar Capital 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 Polar Capital will offset losses from the drop in Polar Capital's long position.| Costco Wholesale vs. Zinc Media Group | Costco Wholesale vs. MediaZest plc | Costco Wholesale vs. Centaur Media | Costco Wholesale vs. Hollywood Bowl Group |
| Polar Capital vs. Endeavour Mining Corp | Polar Capital vs. Jacquet Metal Service | Polar Capital vs. Tyson Foods Cl | Polar Capital vs. Tatton Asset Management |
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 CEOs Directory module to screen CEOs from public companies around the world.
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