Correlation Between Costco Wholesale and Compugroup Medical
Can any of the company-specific risk be diversified away by investing in both Costco Wholesale and Compugroup Medical 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 Compugroup Medical 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 Compugroup Medical SE, you can compare the effects of market volatilities on Costco Wholesale and Compugroup Medical 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 Compugroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costco Wholesale and Compugroup Medical.
Diversification Opportunities for Costco Wholesale and Compugroup Medical
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Costco and Compugroup is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale Corp and Compugroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compugroup Medical 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 Compugroup Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compugroup Medical has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and Compugroup Medical go up and down completely randomly.
Pair Corralation between Costco Wholesale and Compugroup Medical
Assuming the 90 days trading horizon Costco Wholesale Corp is expected to generate 0.48 times more return on investment than Compugroup Medical. However, Costco Wholesale Corp is 2.09 times less risky than Compugroup Medical. It trades about 0.14 of its potential returns per unit of risk. Compugroup Medical SE is currently generating about -0.08 per unit of risk. If you would invest 46,239 in Costco Wholesale Corp on September 3, 2024 and sell it today you would earn a total of 45,351 from holding Costco Wholesale Corp or generate 98.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Costco Wholesale Corp vs. Compugroup Medical SE
Performance |
| Timeline |
| Costco Wholesale Corp |
| Compugroup Medical |
Costco Wholesale and Compugroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costco Wholesale and Compugroup Medical
The main advantage of trading using opposite Costco Wholesale and Compugroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, Compugroup Medical 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 Compugroup Medical will offset losses from the drop in Compugroup Medical's long position.| Costco Wholesale vs. TOTAL GABON | Costco Wholesale vs. Walgreens Boots Alliance | Costco Wholesale vs. Peak Resources Limited |
| Compugroup Medical vs. ATRESMEDIA | Compugroup Medical vs. Corsair Gaming | Compugroup Medical vs. Hollywood Bowl Group | Compugroup Medical vs. RCS MediaGroup SpA |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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