Correlation Between Bellevue Healthcare and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both Bellevue Healthcare 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 Bellevue Healthcare and Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bellevue Healthcare Trust and Costco Wholesale Corp, you can compare the effects of market volatilities on Bellevue Healthcare 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 Bellevue Healthcare with a short position of Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bellevue Healthcare and Costco Wholesale.
Diversification Opportunities for Bellevue Healthcare and Costco Wholesale
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bellevue and Costco is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Bellevue Healthcare Trust 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 Bellevue Healthcare 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 Bellevue Healthcare Trust 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 Bellevue Healthcare i.e., Bellevue Healthcare and Costco Wholesale go up and down completely randomly.
Pair Corralation between Bellevue Healthcare and Costco Wholesale
Assuming the 90 days trading horizon Bellevue Healthcare Trust is expected to generate 1.26 times more return on investment than Costco Wholesale. However, Bellevue Healthcare is 1.26 times more volatile than Costco Wholesale Corp. It trades about 0.28 of its potential returns per unit of risk. Costco Wholesale Corp is currently generating about -0.42 per unit of risk. If you would invest 13,920 in Bellevue Healthcare Trust on October 15, 2024 and sell it today you would earn a total of 840.00 from holding Bellevue Healthcare Trust or generate 6.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Bellevue Healthcare Trust vs. Costco Wholesale Corp
Performance |
| Timeline |
| Bellevue Healthcare Trust |
| Costco Wholesale Corp |
Bellevue Healthcare and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bellevue Healthcare and Costco Wholesale
The main advantage of trading using opposite Bellevue Healthcare and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bellevue Healthcare 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.| Bellevue Healthcare vs. SMA Solar Technology | Bellevue Healthcare vs. PureTech Health plc | Bellevue Healthcare vs. Polar Capital Technology | Bellevue Healthcare vs. United Utilities Group |
| Costco Wholesale vs. Bellevue Healthcare Trust | Costco Wholesale vs. Cardinal Health | Costco Wholesale vs. Tavistock Investments Plc | Costco Wholesale vs. FC Investment Trust |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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