Correlation Between Costco Wholesale and Dividend
Can any of the company-specific risk be diversified away by investing in both Costco Wholesale and Dividend 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 Dividend 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 Dividend 15 Split, you can compare the effects of market volatilities on Costco Wholesale and Dividend 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 Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costco Wholesale and Dividend.
Diversification Opportunities for Costco Wholesale and Dividend
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Costco and Dividend is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale Corp and Dividend 15 Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dividend 15 Split 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 Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dividend 15 Split has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and Dividend go up and down completely randomly.
Pair Corralation between Costco Wholesale and Dividend
Assuming the 90 days trading horizon Costco Wholesale Corp is expected to generate 4.13 times more return on investment than Dividend. However, Costco Wholesale is 4.13 times more volatile than Dividend 15 Split. It trades about 0.36 of its potential returns per unit of risk. Dividend 15 Split is currently generating about 0.33 per unit of risk. If you would invest 4,110 in Costco Wholesale Corp on September 3, 2024 and sell it today you would earn a total of 408.00 from holding Costco Wholesale Corp or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Costco Wholesale Corp vs. Dividend 15 Split
Performance |
| Timeline |
| Costco Wholesale Corp |
| Dividend 15 Split |
Costco Wholesale and Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costco Wholesale and Dividend
The main advantage of trading using opposite Costco Wholesale and Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, Dividend 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 Dividend will offset losses from the drop in Dividend's long position.| Costco Wholesale vs. High Liner Foods | Costco Wholesale vs. Richelieu Hardware | Costco Wholesale vs. International Zeolite Corp | Costco Wholesale vs. European Residential Real |
| Dividend vs. JPMorgan Chase Co | Dividend vs. Bank of America | Dividend vs. Royal Bank of | Dividend vs. Royal Bank of |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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