Correlation Between Alstria Office and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both Alstria Office 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 Alstria Office and Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between alstria office REIT AG and Costco Wholesale Corp, you can compare the effects of market volatilities on Alstria Office 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 Alstria Office with a short position of Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alstria Office and Costco Wholesale.
Diversification Opportunities for Alstria Office and Costco Wholesale
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alstria and Costco is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding alstria office REIT AG 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 Alstria Office 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 alstria office REIT AG 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 Alstria Office i.e., Alstria Office and Costco Wholesale go up and down completely randomly.
Pair Corralation between Alstria Office and Costco Wholesale
Assuming the 90 days horizon alstria office REIT AG is expected to under-perform the Costco Wholesale. In addition to that, Alstria Office is 6.93 times more volatile than Costco Wholesale Corp. It trades about -0.25 of its total potential returns per unit of risk. Costco Wholesale Corp is currently generating about -0.39 per unit of volatility. If you would invest 95,150 in Costco Wholesale Corp on October 17, 2024 and sell it today you would lose (6,420) from holding Costco Wholesale Corp or give up 6.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
alstria office REIT AG vs. Costco Wholesale Corp
Performance |
| Timeline |
| alstria office REIT |
| Costco Wholesale Corp |
Alstria Office and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alstria Office and Costco Wholesale
The main advantage of trading using opposite Alstria Office and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alstria Office 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.| Alstria Office vs. PKSHA TECHNOLOGY INC | Alstria Office vs. Minerals Technologies | Alstria Office vs. Playtech plc | Alstria Office vs. Sunny Optical Technology |
| Costco Wholesale vs. CITY OFFICE REIT | Costco Wholesale vs. alstria office REIT AG | Costco Wholesale vs. American Eagle Outfitters | Costco Wholesale vs. COFCO Joycome Foods |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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