Correlation Between Costco Wholesale and BECLE SAB
Can any of the company-specific risk be diversified away by investing in both Costco Wholesale and BECLE SAB 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 BECLE SAB 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 BECLE SAB DE, you can compare the effects of market volatilities on Costco Wholesale and BECLE SAB 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 BECLE SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costco Wholesale and BECLE SAB.
Diversification Opportunities for Costco Wholesale and BECLE SAB
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Costco and BECLE is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale Corp and BECLE SAB DE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BECLE SAB DE 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 BECLE SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BECLE SAB DE has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and BECLE SAB go up and down completely randomly.
Pair Corralation between Costco Wholesale and BECLE SAB
Assuming the 90 days trading horizon Costco Wholesale is expected to generate 2.86 times less return on investment than BECLE SAB. But when comparing it to its historical volatility, Costco Wholesale Corp is 2.6 times less risky than BECLE SAB. It trades about 0.2 of its potential returns per unit of risk. BECLE SAB DE is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 84.00 in BECLE SAB DE on December 1, 2024 and sell it today you would earn a total of 12.00 from holding BECLE SAB DE or generate 14.29% 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 Corp vs. BECLE SAB DE
Performance |
| Timeline |
| Costco Wholesale Corp |
| BECLE SAB DE |
Costco Wholesale and BECLE SAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costco Wholesale and BECLE SAB
The main advantage of trading using opposite Costco Wholesale and BECLE SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, BECLE SAB 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 BECLE SAB will offset losses from the drop in BECLE SAB's long position.| Costco Wholesale vs. GALENA MINING LTD | Costco Wholesale vs. Globex Mining Enterprises | Costco Wholesale vs. JLF INVESTMENT | Costco Wholesale vs. Guangdong Investment Limited |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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