Correlation Between Costco Wholesale and Manulife Finl
Can any of the company-specific risk be diversified away by investing in both Costco Wholesale and Manulife Finl 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 Manulife Finl 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 Manulife Finl Srs, you can compare the effects of market volatilities on Costco Wholesale and Manulife Finl 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 Manulife Finl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costco Wholesale and Manulife Finl.
Diversification Opportunities for Costco Wholesale and Manulife Finl
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Costco and Manulife is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale Corp and Manulife Finl Srs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Finl Srs 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 Manulife Finl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Finl Srs has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and Manulife Finl go up and down completely randomly.
Pair Corralation between Costco Wholesale and Manulife Finl
Assuming the 90 days trading horizon Costco Wholesale Corp is expected to generate 1.84 times more return on investment than Manulife Finl. However, Costco Wholesale is 1.84 times more volatile than Manulife Finl Srs. It trades about 0.12 of its potential returns per unit of risk. Manulife Finl Srs is currently generating about 0.05 per unit of risk. If you would invest 3,777 in Costco Wholesale Corp on August 29, 2024 and sell it today you would earn a total of 684.00 from holding Costco Wholesale Corp or generate 18.11% 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. Manulife Finl Srs
Performance |
| Timeline |
| Costco Wholesale Corp |
| Manulife Finl Srs |
Costco Wholesale and Manulife Finl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costco Wholesale and Manulife Finl
The main advantage of trading using opposite Costco Wholesale and Manulife Finl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, Manulife Finl 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 Manulife Finl will offset losses from the drop in Manulife Finl's long position.| Costco Wholesale vs. CVW CleanTech | Costco Wholesale vs. Ramp Metals | Costco Wholesale vs. Firan Technology Group | Costco Wholesale vs. Oculus VisionTech |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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