Correlation Between GAMING FAC and COSTCO WHOLESALE
Can any of the company-specific risk be diversified away by investing in both GAMING FAC 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 GAMING FAC and COSTCO WHOLESALE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMING FAC SA and COSTCO WHOLESALE CDR, you can compare the effects of market volatilities on GAMING FAC 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 GAMING FAC with a short position of COSTCO WHOLESALE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMING FAC and COSTCO WHOLESALE.
Diversification Opportunities for GAMING FAC and COSTCO WHOLESALE
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GAMING and COSTCO is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding GAMING FAC SA 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 GAMING FAC 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 GAMING FAC SA 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 GAMING FAC i.e., GAMING FAC and COSTCO WHOLESALE go up and down completely randomly.
Pair Corralation between GAMING FAC and COSTCO WHOLESALE
Assuming the 90 days horizon GAMING FAC SA is expected to generate 2.06 times more return on investment than COSTCO WHOLESALE. However, GAMING FAC is 2.06 times more volatile than COSTCO WHOLESALE CDR. It trades about 0.3 of its potential returns per unit of risk. COSTCO WHOLESALE CDR is currently generating about 0.04 per unit of risk. If you would invest 154.00 in GAMING FAC SA on October 25, 2024 and sell it today you would earn a total of 22.00 from holding GAMING FAC SA or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMING FAC SA vs. COSTCO WHOLESALE CDR
Performance |
| Timeline |
| GAMING FAC SA |
| COSTCO WHOLESALE CDR |
GAMING FAC and COSTCO WHOLESALE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMING FAC and COSTCO WHOLESALE
The main advantage of trading using opposite GAMING FAC and COSTCO WHOLESALE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMING FAC 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.| GAMING FAC vs. RYANAIR HLDGS ADR | GAMING FAC vs. Scottish Mortgage Investment | GAMING FAC vs. HK Electric Investments | GAMING FAC vs. Fair Isaac Corp |
| COSTCO WHOLESALE vs. Compagnie Plastic Omnium | COSTCO WHOLESALE vs. Carnegie Clean Energy | COSTCO WHOLESALE vs. Aristocrat Leisure Limited | COSTCO WHOLESALE vs. Clean Energy Fuels |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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