Correlation Between Costco Wholesale and CyberAgent
Can any of the company-specific risk be diversified away by investing in both Costco Wholesale and CyberAgent 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 CyberAgent 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 CyberAgent, you can compare the effects of market volatilities on Costco Wholesale and CyberAgent 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 CyberAgent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costco Wholesale and CyberAgent.
Diversification Opportunities for Costco Wholesale and CyberAgent
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Costco and CyberAgent is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale Corp and CyberAgent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberAgent 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 CyberAgent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberAgent has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and CyberAgent go up and down completely randomly.
Pair Corralation between Costco Wholesale and CyberAgent
Assuming the 90 days trading horizon Costco Wholesale Corp is expected to generate 0.67 times more return on investment than CyberAgent. However, Costco Wholesale Corp is 1.49 times less risky than CyberAgent. It trades about 0.2 of its potential returns per unit of risk. CyberAgent is currently generating about 0.01 per unit of risk. If you would invest 82,201 in Costco Wholesale Corp on September 12, 2024 and sell it today you would earn a total of 13,519 from holding Costco Wholesale Corp or generate 16.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Costco Wholesale Corp vs. CyberAgent
Performance |
| Timeline |
| Costco Wholesale Corp |
| CyberAgent |
Costco Wholesale and CyberAgent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costco Wholesale and CyberAgent
The main advantage of trading using opposite Costco Wholesale and CyberAgent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, CyberAgent 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 CyberAgent will offset losses from the drop in CyberAgent's long position.| Costco Wholesale vs. PennyMac Mortgage Investment | Costco Wholesale vs. Singapore Airlines Limited | Costco Wholesale vs. Aegean Airlines SA | Costco Wholesale vs. Southwest Airlines Co |
| CyberAgent vs. CNVISION MEDIA | CyberAgent vs. YOOMA WELLNESS INC | CyberAgent vs. Natural Health Trends | CyberAgent vs. National Health Investors |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |