Correlation Between Costco Wholesale and Gruppo Mutuionline
Can any of the company-specific risk be diversified away by investing in both Costco Wholesale and Gruppo Mutuionline 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 Gruppo Mutuionline 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 Gruppo Mutuionline SpA, you can compare the effects of market volatilities on Costco Wholesale and Gruppo Mutuionline 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 Gruppo Mutuionline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costco Wholesale and Gruppo Mutuionline.
Diversification Opportunities for Costco Wholesale and Gruppo Mutuionline
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Costco and Gruppo is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale Corp and Gruppo Mutuionline SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gruppo Mutuionline SpA 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 Gruppo Mutuionline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gruppo Mutuionline SpA has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and Gruppo Mutuionline go up and down completely randomly.
Pair Corralation between Costco Wholesale and Gruppo Mutuionline
Assuming the 90 days trading horizon Costco Wholesale Corp is expected to generate 0.64 times more return on investment than Gruppo Mutuionline. However, Costco Wholesale Corp is 1.57 times less risky than Gruppo Mutuionline. It trades about 0.44 of its potential returns per unit of risk. Gruppo Mutuionline SpA is currently generating about 0.22 per unit of risk. If you would invest 81,080 in Costco Wholesale Corp on September 4, 2024 and sell it today you would earn a total of 11,700 from holding Costco Wholesale Corp or generate 14.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Costco Wholesale Corp vs. Gruppo Mutuionline SpA
Performance |
| Timeline |
| Costco Wholesale Corp |
| Gruppo Mutuionline SpA |
Costco Wholesale and Gruppo Mutuionline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costco Wholesale and Gruppo Mutuionline
The main advantage of trading using opposite Costco Wholesale and Gruppo Mutuionline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, Gruppo Mutuionline 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 Gruppo Mutuionline will offset losses from the drop in Gruppo Mutuionline's long position.| Costco Wholesale vs. Calibre Mining Corp | Costco Wholesale vs. X FAB Silicon Foundries | Costco Wholesale vs. Wayside Technology Group | Costco Wholesale vs. AECOM TECHNOLOGY |
| Gruppo Mutuionline vs. Apple Inc | Gruppo Mutuionline vs. Apple Inc | Gruppo Mutuionline vs. Apple Inc | Gruppo Mutuionline vs. Apple Inc |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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