Correlation Between Costco Wholesale and Retail Estates
Can any of the company-specific risk be diversified away by investing in both Costco Wholesale and Retail Estates 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 Retail Estates 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 Retail Estates NV, you can compare the effects of market volatilities on Costco Wholesale and Retail Estates 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 Retail Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costco Wholesale and Retail Estates.
Diversification Opportunities for Costco Wholesale and Retail Estates
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Costco and Retail is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale Corp and Retail Estates NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Estates NV 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 Retail Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Estates NV has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and Retail Estates go up and down completely randomly.
Pair Corralation between Costco Wholesale and Retail Estates
Assuming the 90 days trading horizon Costco Wholesale Corp is expected to generate 1.41 times more return on investment than Retail Estates. However, Costco Wholesale is 1.41 times more volatile than Retail Estates NV. It trades about 0.27 of its potential returns per unit of risk. Retail Estates NV is currently generating about -0.38 per unit of risk. If you would invest 83,309 in Costco Wholesale Corp on August 24, 2024 and sell it today you would earn a total of 7,311 from holding Costco Wholesale Corp or generate 8.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Costco Wholesale Corp vs. Retail Estates NV
Performance |
| Timeline |
| Costco Wholesale Corp |
| Retail Estates NV |
Costco Wholesale and Retail Estates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costco Wholesale and Retail Estates
The main advantage of trading using opposite Costco Wholesale and Retail Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, Retail Estates 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 Retail Estates will offset losses from the drop in Retail Estates' long position.| Costco Wholesale vs. YATRA ONLINE DL 0001 | Costco Wholesale vs. PKSHA TECHNOLOGY INC | Costco Wholesale vs. Salesforce | Costco Wholesale vs. CARSALESCOM |
| Retail Estates vs. Simon Property Group | Retail Estates vs. Vicinity Centres | Retail Estates vs. Superior Plus Corp | Retail Estates vs. NMI Holdings |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |