Correlation Between AEON STORES and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both AEON STORES 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 AEON STORES and Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEON STORES and Costco Wholesale Corp, you can compare the effects of market volatilities on AEON STORES 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 AEON STORES with a short position of Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEON STORES and Costco Wholesale.
Diversification Opportunities for AEON STORES and Costco Wholesale
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AEON and Costco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AEON STORES 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 AEON STORES 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 AEON STORES 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 AEON STORES i.e., AEON STORES and Costco Wholesale go up and down completely randomly.
Pair Corralation between AEON STORES and Costco Wholesale
If you would invest 5.90 in AEON STORES on December 13, 2024 and sell it today you would earn a total of 0.00 from holding AEON STORES or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEON STORES vs. Costco Wholesale Corp
Performance |
| Timeline |
| AEON STORES |
| Costco Wholesale Corp |
AEON STORES and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEON STORES and Costco Wholesale
The main advantage of trading using opposite AEON STORES and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEON STORES 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.| AEON STORES vs. LINMON MEDIA LTD | ||
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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