Correlation Between Costco Wholesale and Pettenati
Can any of the company-specific risk be diversified away by investing in both Costco Wholesale and Pettenati 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 Pettenati into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Costco Wholesale and Pettenati SA Industria, you can compare the effects of market volatilities on Costco Wholesale and Pettenati 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 Pettenati. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costco Wholesale and Pettenati.
Diversification Opportunities for Costco Wholesale and Pettenati
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Costco and Pettenati is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale and Pettenati SA Industria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pettenati SA Industria 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 Pettenati. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pettenati SA Industria has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and Pettenati go up and down completely randomly.
Pair Corralation between Costco Wholesale and Pettenati
Assuming the 90 days trading horizon Costco Wholesale is expected to generate 1.25 times more return on investment than Pettenati. However, Costco Wholesale is 1.25 times more volatile than Pettenati SA Industria. It trades about 0.38 of its potential returns per unit of risk. Pettenati SA Industria is currently generating about -0.26 per unit of risk. If you would invest 12,880 in Costco Wholesale on September 3, 2024 and sell it today you would earn a total of 1,742 from holding Costco Wholesale or generate 13.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Costco Wholesale vs. Pettenati SA Industria
Performance |
| Timeline |
| Costco Wholesale |
| Pettenati SA Industria |
Costco Wholesale and Pettenati Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costco Wholesale and Pettenati
The main advantage of trading using opposite Costco Wholesale and Pettenati positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, Pettenati 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 Pettenati will offset losses from the drop in Pettenati'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 |
| Pettenati vs. Companhia de Tecidos | Pettenati vs. Companhia de Tecidos | Pettenati vs. Karsten SA | Pettenati vs. Karsten SA |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |