Correlation Between Costco Wholesale and Boat Rocker
Can any of the company-specific risk be diversified away by investing in both Costco Wholesale and Boat Rocker 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 Costco Wholesale and Boat Rocker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Costco Wholesale Corp and Boat Rocker Media, you can compare the effects of market volatilities on Costco Wholesale and Boat Rocker 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 Costco Wholesale with a short position of Boat Rocker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costco Wholesale and Boat Rocker.
Diversification Opportunities for Costco Wholesale and Boat Rocker
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Costco and Boat is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale Corp and Boat Rocker Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boat Rocker Media and Costco Wholesale 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 Costco Wholesale Corp are associated (or correlated) with Boat Rocker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boat Rocker Media has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and Boat Rocker go up and down completely randomly.
Pair Corralation between Costco Wholesale and Boat Rocker
Assuming the 90 days trading horizon Costco Wholesale Corp is expected to generate 0.19 times more return on investment than Boat Rocker. However, Costco Wholesale Corp is 5.16 times less risky than Boat Rocker. It trades about 0.38 of its potential returns per unit of risk. Boat Rocker Media is currently generating about -0.17 per unit of risk. If you would invest 4,077 in Costco Wholesale Corp on September 2, 2024 and sell it today you would earn a total of 441.00 from holding Costco Wholesale Corp or generate 10.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Costco Wholesale Corp vs. Boat Rocker Media
Performance |
| Timeline |
| Costco Wholesale Corp |
| Boat Rocker Media |
Costco Wholesale and Boat Rocker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costco Wholesale and Boat Rocker
The main advantage of trading using opposite Costco Wholesale and Boat Rocker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, Boat Rocker 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 Boat Rocker will offset losses from the drop in Boat Rocker's long position.| Costco Wholesale vs. Amazon CDR | Costco Wholesale vs. Berkshire Hathaway CDR | Costco Wholesale vs. UnitedHealth Group CDR | Costco Wholesale vs. Apple Inc CDR |
| Boat Rocker vs. Thunderbird Entertainment Group | Boat Rocker vs. VerticalScope Holdings | Boat Rocker vs. WildBrain | Boat Rocker vs. Kits Eyecare |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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