Correlation Between Costco Wholesale and Gamehost
Can any of the company-specific risk be diversified away by investing in both Costco Wholesale and Gamehost 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 Gamehost 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 Gamehost, you can compare the effects of market volatilities on Costco Wholesale and Gamehost 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 Gamehost. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costco Wholesale and Gamehost.
Diversification Opportunities for Costco Wholesale and Gamehost
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Costco and Gamehost is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale Corp and Gamehost in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamehost 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 Gamehost. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamehost has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and Gamehost go up and down completely randomly.
Pair Corralation between Costco Wholesale and Gamehost
Assuming the 90 days trading horizon Costco Wholesale Corp is expected to generate 1.3 times more return on investment than Gamehost. However, Costco Wholesale is 1.3 times more volatile than Gamehost. It trades about 0.14 of its potential returns per unit of risk. Gamehost is currently generating about 0.08 per unit of risk. If you would invest 3,114 in Costco Wholesale Corp on September 12, 2024 and sell it today you would earn a total of 1,492 from holding Costco Wholesale Corp or generate 47.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Costco Wholesale Corp vs. Gamehost
Performance |
| Timeline |
| Costco Wholesale Corp |
| Gamehost |
Costco Wholesale and Gamehost Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costco Wholesale and Gamehost
The main advantage of trading using opposite Costco Wholesale and Gamehost positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, Gamehost 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 Gamehost will offset losses from the drop in Gamehost's long position.| Costco Wholesale vs. Gamehost | Costco Wholesale vs. Olympia Financial Group | Costco Wholesale vs. Champion Gaming Group | Costco Wholesale vs. Bragg Gaming Group |
| Gamehost vs. Chesswood Group Limited | Gamehost vs. Medical Facilities | Gamehost vs. Information Services | Gamehost vs. K Bro Linen |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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