Correlation Between Costco Wholesale and Banco Pine
Can any of the company-specific risk be diversified away by investing in both Costco Wholesale and Banco Pine 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 Banco Pine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Costco Wholesale and Banco Pine SA, you can compare the effects of market volatilities on Costco Wholesale and Banco Pine 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 Banco Pine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costco Wholesale and Banco Pine.
Diversification Opportunities for Costco Wholesale and Banco Pine
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Costco and Banco is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale and Banco Pine SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Pine SA 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 Banco Pine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Pine SA has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and Banco Pine go up and down completely randomly.
Pair Corralation between Costco Wholesale and Banco Pine
Assuming the 90 days trading horizon Costco Wholesale is expected to generate 0.68 times more return on investment than Banco Pine. However, Costco Wholesale is 1.48 times less risky than Banco Pine. It trades about 0.2 of its potential returns per unit of risk. Banco Pine SA is currently generating about 0.03 per unit of risk. If you would invest 9,574 in Costco Wholesale on September 3, 2024 and sell it today you would earn a total of 5,048 from holding Costco Wholesale or generate 52.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Costco Wholesale vs. Banco Pine SA
Performance |
| Timeline |
| Costco Wholesale |
| Banco Pine SA |
Costco Wholesale and Banco Pine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costco Wholesale and Banco Pine
The main advantage of trading using opposite Costco Wholesale and Banco Pine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, Banco Pine 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 Banco Pine will offset losses from the drop in Banco Pine's long position.| Costco Wholesale vs. Take Two Interactive Software | Costco Wholesale vs. Unity Software | Costco Wholesale vs. Fidelity National Information | Costco Wholesale vs. Dell Technologies |
| Banco Pine vs. Banco do Estado | Banco Pine vs. MAHLE Metal Leve | Banco Pine vs. Tupy SA | Banco Pine vs. BB Seguridade Participacoes |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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