Correlation Between Prosus NV and COSTCO WHOLESALE
Can any of the company-specific risk be diversified away by investing in both Prosus NV and COSTCO WHOLESALE 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 Prosus NV and COSTCO WHOLESALE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosus NV and COSTCO WHOLESALE CDR, you can compare the effects of market volatilities on Prosus NV and COSTCO WHOLESALE 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 Prosus NV with a short position of COSTCO WHOLESALE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosus NV and COSTCO WHOLESALE.
Diversification Opportunities for Prosus NV and COSTCO WHOLESALE
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Prosus and COSTCO is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Prosus NV and COSTCO WHOLESALE CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSTCO WHOLESALE CDR and Prosus NV 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 Prosus NV are associated (or correlated) with COSTCO WHOLESALE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSTCO WHOLESALE CDR has no effect on the direction of Prosus NV i.e., Prosus NV and COSTCO WHOLESALE go up and down completely randomly.
Pair Corralation between Prosus NV and COSTCO WHOLESALE
Assuming the 90 days horizon Prosus NV is expected to generate 1.31 times less return on investment than COSTCO WHOLESALE. In addition to that, Prosus NV is 1.12 times more volatile than COSTCO WHOLESALE CDR. It trades about 0.08 of its total potential returns per unit of risk. COSTCO WHOLESALE CDR is currently generating about 0.12 per unit of volatility. If you would invest 1,952 in COSTCO WHOLESALE CDR on September 12, 2024 and sell it today you would earn a total of 1,128 from holding COSTCO WHOLESALE CDR or generate 57.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosus NV vs. COSTCO WHOLESALE CDR
Performance |
| Timeline |
| Prosus NV |
| COSTCO WHOLESALE CDR |
Prosus NV and COSTCO WHOLESALE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosus NV and COSTCO WHOLESALE
The main advantage of trading using opposite Prosus NV and COSTCO WHOLESALE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosus NV position performs unexpectedly, COSTCO WHOLESALE 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 COSTCO WHOLESALE will offset losses from the drop in COSTCO WHOLESALE's long position.| Prosus NV vs. COSTCO WHOLESALE CDR | Prosus NV vs. QURATE RETAIL INC | Prosus NV vs. Penn National Gaming | Prosus NV vs. International Game Technology |
| COSTCO WHOLESALE vs. Walmart | COSTCO WHOLESALE vs. Costco Wholesale | COSTCO WHOLESALE vs. Dollarama | COSTCO WHOLESALE vs. Superior Plus 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |