Correlation Between Costco Wholesale and Air Liquide
Can any of the company-specific risk be diversified away by investing in both Costco Wholesale and Air Liquide 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 Air Liquide 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 Air Liquide SA, you can compare the effects of market volatilities on Costco Wholesale and Air Liquide 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 Air Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costco Wholesale and Air Liquide.
Diversification Opportunities for Costco Wholesale and Air Liquide
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Costco and Air is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale Corp and Air Liquide SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Liquide 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 Corp are associated (or correlated) with Air Liquide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Liquide SA has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and Air Liquide go up and down completely randomly.
Pair Corralation between Costco Wholesale and Air Liquide
Assuming the 90 days trading horizon Costco Wholesale Corp is expected to under-perform the Air Liquide. But the stock apears to be less risky and, when comparing its historical volatility, Costco Wholesale Corp is 1.06 times less risky than Air Liquide. The stock trades about -0.32 of its potential returns per unit of risk. The Air Liquide SA is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 15,934 in Air Liquide SA on October 16, 2024 and sell it today you would lose (280.00) from holding Air Liquide SA or give up 1.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Costco Wholesale Corp vs. Air Liquide SA
Performance |
| Timeline |
| Costco Wholesale Corp |
| Air Liquide SA |
Costco Wholesale and Air Liquide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costco Wholesale and Air Liquide
The main advantage of trading using opposite Costco Wholesale and Air Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, Air Liquide 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 Air Liquide will offset losses from the drop in Air Liquide's long position.| Costco Wholesale vs. EPSILON HEALTHCARE LTD | Costco Wholesale vs. OPKO HEALTH | Costco Wholesale vs. Urban Outfitters | Costco Wholesale vs. URBAN OUTFITTERS |
| Air Liquide vs. Dupont De Nemours | Air Liquide vs. LyondellBasell Industries NV | Air Liquide vs. PPG Industries |
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 Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |