Correlation Between AGNC INVESTMENT and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both AGNC INVESTMENT 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 AGNC INVESTMENT and Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGNC INVESTMENT and Costco Wholesale Corp, you can compare the effects of market volatilities on AGNC INVESTMENT 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 AGNC INVESTMENT with a short position of Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGNC INVESTMENT and Costco Wholesale.
Diversification Opportunities for AGNC INVESTMENT and Costco Wholesale
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AGNC and Costco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AGNC INVESTMENT and Costco Wholesale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costco Wholesale Corp and AGNC INVESTMENT 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 AGNC INVESTMENT 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 Corp has no effect on the direction of AGNC INVESTMENT i.e., AGNC INVESTMENT and Costco Wholesale go up and down completely randomly.
Pair Corralation between AGNC INVESTMENT and Costco Wholesale
Assuming the 90 days trading horizon AGNC INVESTMENT is expected to generate 1.7 times less return on investment than Costco Wholesale. In addition to that, AGNC INVESTMENT is 1.14 times more volatile than Costco Wholesale Corp. It trades about 0.2 of its total potential returns per unit of risk. Costco Wholesale Corp is currently generating about 0.38 per unit of volatility. If you would invest 89,030 in Costco Wholesale Corp on November 7, 2024 and sell it today you would earn a total of 8,910 from holding Costco Wholesale Corp or generate 10.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
AGNC INVESTMENT vs. Costco Wholesale Corp
Performance |
| Timeline |
| AGNC INVESTMENT |
| Costco Wholesale Corp |
AGNC INVESTMENT and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGNC INVESTMENT and Costco Wholesale
The main advantage of trading using opposite AGNC INVESTMENT and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGNC INVESTMENT 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.| AGNC INVESTMENT vs. FAST RETAIL ADR | AGNC INVESTMENT vs. Burlington Stores | AGNC INVESTMENT vs. Meiko Electronics Co | AGNC INVESTMENT vs. Arrow Electronics |
| Costco Wholesale vs. MGIC INVESTMENT | Costco Wholesale vs. WILLIS LEASE FIN | Costco Wholesale vs. LOANDEPOT INC A | Costco Wholesale vs. JLF INVESTMENT |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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