Correlation Between Costco Wholesale and JIAHUA STORES
Can any of the company-specific risk be diversified away by investing in both Costco Wholesale and JIAHUA STORES 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 JIAHUA STORES 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 JIAHUA STORES, you can compare the effects of market volatilities on Costco Wholesale and JIAHUA STORES 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 JIAHUA STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costco Wholesale and JIAHUA STORES.
Diversification Opportunities for Costco Wholesale and JIAHUA STORES
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Costco and JIAHUA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale Corp and JIAHUA STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JIAHUA STORES 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 JIAHUA STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JIAHUA STORES has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and JIAHUA STORES go up and down completely randomly.
Pair Corralation between Costco Wholesale and JIAHUA STORES
If you would invest 54,748 in Costco Wholesale Corp on September 3, 2024 and sell it today you would earn a total of 36,842 from holding Costco Wholesale Corp or generate 67.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Costco Wholesale Corp vs. JIAHUA STORES
Performance |
| Timeline |
| Costco Wholesale Corp |
| JIAHUA STORES |
Costco Wholesale and JIAHUA STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costco Wholesale and JIAHUA STORES
The main advantage of trading using opposite Costco Wholesale and JIAHUA STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, JIAHUA STORES 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 JIAHUA STORES will offset losses from the drop in JIAHUA STORES's long position.| Costco Wholesale vs. TOTAL GABON | Costco Wholesale vs. Walgreens Boots Alliance | Costco Wholesale vs. Peak Resources Limited |
| JIAHUA STORES vs. DICKS Sporting Goods | JIAHUA STORES vs. Burlington Stores | JIAHUA STORES vs. USWE SPORTS AB | JIAHUA STORES 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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