Correlation Between Costco Wholesale and TINC Comm
Can any of the company-specific risk be diversified away by investing in both Costco Wholesale and TINC Comm 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 TINC Comm 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 TINC Comm VA, you can compare the effects of market volatilities on Costco Wholesale and TINC Comm 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 TINC Comm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costco Wholesale and TINC Comm.
Diversification Opportunities for Costco Wholesale and TINC Comm
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Costco and TINC is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale Corp and TINC Comm VA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TINC Comm VA 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 TINC Comm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TINC Comm VA has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and TINC Comm go up and down completely randomly.
Pair Corralation between Costco Wholesale and TINC Comm
Assuming the 90 days trading horizon Costco Wholesale Corp is expected to generate 2.04 times more return on investment than TINC Comm. However, Costco Wholesale is 2.04 times more volatile than TINC Comm VA. It trades about 0.41 of its potential returns per unit of risk. TINC Comm VA is currently generating about -0.29 per unit of risk. If you would invest 81,080 in Costco Wholesale Corp on September 3, 2024 and sell it today you would earn a total of 10,510 from holding Costco Wholesale Corp or generate 12.96% 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. TINC Comm VA
Performance |
| Timeline |
| Costco Wholesale Corp |
| TINC Comm VA |
Costco Wholesale and TINC Comm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costco Wholesale and TINC Comm
The main advantage of trading using opposite Costco Wholesale and TINC Comm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, TINC Comm 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 TINC Comm will offset losses from the drop in TINC Comm's long position.| Costco Wholesale vs. TOTAL GABON | Costco Wholesale vs. Walgreens Boots Alliance | Costco Wholesale vs. Peak Resources Limited |
| TINC Comm vs. Costco Wholesale Corp | TINC Comm vs. RETAIL FOOD GROUP | TINC Comm vs. National Retail Properties | TINC Comm vs. QURATE RETAIL INC |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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