Correlation Between VPower Group and COSTCO WHOLESALE
Can any of the company-specific risk be diversified away by investing in both VPower Group 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 VPower Group and COSTCO WHOLESALE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VPower Group International and COSTCO WHOLESALE CDR, you can compare the effects of market volatilities on VPower Group 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 VPower Group with a short position of COSTCO WHOLESALE. Check out your portfolio center. Please also check ongoing floating volatility patterns of VPower Group and COSTCO WHOLESALE.
Diversification Opportunities for VPower Group and COSTCO WHOLESALE
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between VPower and COSTCO is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding VPower Group International 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 VPower Group 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 VPower Group International 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 VPower Group i.e., VPower Group and COSTCO WHOLESALE go up and down completely randomly.
Pair Corralation between VPower Group and COSTCO WHOLESALE
Assuming the 90 days horizon VPower Group International is expected to generate 13.03 times more return on investment than COSTCO WHOLESALE. However, VPower Group is 13.03 times more volatile than COSTCO WHOLESALE CDR. It trades about 0.02 of its potential returns per unit of risk. COSTCO WHOLESALE CDR is currently generating about -0.28 per unit of risk. If you would invest 1.15 in VPower Group International on October 13, 2024 and sell it today you would lose (0.15) from holding VPower Group International or give up 13.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VPower Group International vs. COSTCO WHOLESALE CDR
Performance |
| Timeline |
| VPower Group Interna |
| COSTCO WHOLESALE CDR |
VPower Group and COSTCO WHOLESALE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VPower Group and COSTCO WHOLESALE
The main advantage of trading using opposite VPower Group and COSTCO WHOLESALE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VPower Group 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.| VPower Group vs. CAREER EDUCATION | VPower Group vs. Chuangs China Investments | VPower Group vs. Gladstone Investment | VPower Group vs. betterU Education Corp |
| COSTCO WHOLESALE vs. SOFI TECHNOLOGIES | COSTCO WHOLESALE vs. Astral Foods Limited | COSTCO WHOLESALE vs. EBRO FOODS | COSTCO WHOLESALE vs. ASPEN TECHINC DL |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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