Correlation Between Costco Wholesale and Global X
Can any of the company-specific risk be diversified away by investing in both Costco Wholesale and Global X 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 Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Costco Wholesale and Global X Funds, you can compare the effects of market volatilities on Costco Wholesale and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costco Wholesale and Global X.
Diversification Opportunities for Costco Wholesale and Global X
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Costco and Global is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds 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 are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Funds has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and Global X go up and down completely randomly.
Pair Corralation between Costco Wholesale and Global X
Assuming the 90 days trading horizon Costco Wholesale is expected to under-perform the Global X. In addition to that, Costco Wholesale is 1.02 times more volatile than Global X Funds. It trades about -0.12 of its total potential returns per unit of risk. Global X Funds is currently generating about -0.1 per unit of volatility. If you would invest 5,090 in Global X Funds on October 12, 2024 and sell it today you would lose (205.00) from holding Global X Funds or give up 4.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Costco Wholesale vs. Global X Funds
Performance |
| Timeline |
| Costco Wholesale |
| Global X Funds |
Costco Wholesale and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costco Wholesale and Global X
The main advantage of trading using opposite Costco Wholesale and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Costco Wholesale vs. Prudential Financial | Costco Wholesale vs. ICICI Bank Limited | Costco Wholesale vs. Beyond Meat | Costco Wholesale vs. Annaly Capital Management, |
| Global X vs. Beyond Meat | Global X vs. Liberty Broadband | Global X vs. T Mobile | Global X vs. Charter Communications |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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