Correlation Between BANK CENTRAL and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both BANK CENTRAL 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 BANK CENTRAL and Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK CENTRAL ASIA and Costco Wholesale Corp, you can compare the effects of market volatilities on BANK CENTRAL 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 BANK CENTRAL with a short position of Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK CENTRAL and Costco Wholesale.
Diversification Opportunities for BANK CENTRAL and Costco Wholesale
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BANK and Costco is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding BANK CENTRAL ASIA 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 BANK CENTRAL 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 BANK CENTRAL ASIA 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 BANK CENTRAL i.e., BANK CENTRAL and Costco Wholesale go up and down completely randomly.
Pair Corralation between BANK CENTRAL and Costco Wholesale
Assuming the 90 days trading horizon BANK CENTRAL ASIA is expected to generate 1.73 times more return on investment than Costco Wholesale. However, BANK CENTRAL is 1.73 times more volatile than Costco Wholesale Corp. It trades about -0.04 of its potential returns per unit of risk. Costco Wholesale Corp is currently generating about -0.12 per unit of risk. If you would invest 60.00 in BANK CENTRAL ASIA on October 19, 2024 and sell it today you would lose (1.00) from holding BANK CENTRAL ASIA or give up 1.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
BANK CENTRAL ASIA vs. Costco Wholesale Corp
Performance |
| Timeline |
| BANK CENTRAL ASIA |
| Costco Wholesale Corp |
BANK CENTRAL and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK CENTRAL and Costco Wholesale
The main advantage of trading using opposite BANK CENTRAL and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK CENTRAL 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.| BANK CENTRAL vs. AAC TECHNOLOGHLDGADR | BANK CENTRAL vs. SOFI TECHNOLOGIES | BANK CENTRAL vs. NetSol Technologies | BANK CENTRAL vs. Advanced Medical Solutions |
| Costco Wholesale vs. Osisko Metals | Costco Wholesale vs. Marie Brizard Wine | Costco Wholesale vs. Grand Canyon Education | Costco Wholesale vs. EMBARK EDUCATION LTD |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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