Correlation Between Costco Wholesale and WIMFARM SA
Can any of the company-specific risk be diversified away by investing in both Costco Wholesale and WIMFARM SA 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 WIMFARM SA 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 WIMFARM SA EO, you can compare the effects of market volatilities on Costco Wholesale and WIMFARM SA 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 WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costco Wholesale and WIMFARM SA.
Diversification Opportunities for Costco Wholesale and WIMFARM SA
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Costco and WIMFARM is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale Corp and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA EO 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 WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and WIMFARM SA go up and down completely randomly.
Pair Corralation between Costco Wholesale and WIMFARM SA
Assuming the 90 days trading horizon Costco Wholesale Corp is expected to generate 0.38 times more return on investment than WIMFARM SA. However, Costco Wholesale Corp is 2.65 times less risky than WIMFARM SA. It trades about 0.12 of its potential returns per unit of risk. WIMFARM SA EO is currently generating about -0.02 per unit of risk. If you would invest 68,259 in Costco Wholesale Corp on October 12, 2024 and sell it today you would earn a total of 23,231 from holding Costco Wholesale Corp or generate 34.03% 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. WIMFARM SA EO
Performance |
| Timeline |
| Costco Wholesale Corp |
| WIMFARM SA EO |
Costco Wholesale and WIMFARM SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costco Wholesale and WIMFARM SA
The main advantage of trading using opposite Costco Wholesale and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, WIMFARM SA 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 WIMFARM SA will offset losses from the drop in WIMFARM SA's long position.| Costco Wholesale vs. Apple Inc | Costco Wholesale vs. Apple Inc | Costco Wholesale vs. Apple Inc | Costco Wholesale vs. Apple Inc |
| WIMFARM SA vs. De Grey Mining | WIMFARM SA vs. Burlington Stores | WIMFARM SA vs. JIAHUA STORES | WIMFARM SA vs. Costco Wholesale Corp |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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