Correlation Between GX AI and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both GX AI 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 GX AI and Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GX AI TECH and Costco Wholesale, you can compare the effects of market volatilities on GX AI 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 GX AI with a short position of Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of GX AI and Costco Wholesale.
Diversification Opportunities for GX AI and Costco Wholesale
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BAIQ39 and Costco is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding GX AI TECH and Costco Wholesale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costco Wholesale and GX AI 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 GX AI TECH 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 has no effect on the direction of GX AI i.e., GX AI and Costco Wholesale go up and down completely randomly.
Pair Corralation between GX AI and Costco Wholesale
Assuming the 90 days trading horizon GX AI TECH is expected to generate 1.24 times more return on investment than Costco Wholesale. However, GX AI is 1.24 times more volatile than Costco Wholesale. It trades about 0.11 of its potential returns per unit of risk. Costco Wholesale is currently generating about 0.12 per unit of risk. If you would invest 4,745 in GX AI TECH on October 7, 2024 and sell it today you would earn a total of 3,286 from holding GX AI TECH or generate 69.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 57.75% |
| Values | Daily Returns |
GX AI TECH vs. Costco Wholesale
Performance |
| Timeline |
| GX AI TECH |
| Costco Wholesale |
GX AI and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GX AI and Costco Wholesale
The main advantage of trading using opposite GX AI and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GX AI 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.| GX AI vs. Taiwan Semiconductor Manufacturing | GX AI vs. Apple Inc | GX AI vs. Alibaba Group Holding | GX AI vs. Banco Santander Chile |
| Costco Wholesale vs. Nordon Indstrias Metalrgicas | Costco Wholesale vs. Truist Financial | Costco Wholesale vs. Metalurgica Gerdau SA | Costco Wholesale vs. Metalrgica Riosulense SA |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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