Correlation Between COSTCO WHOLESALE and PLAYMATES TOYS
Can any of the company-specific risk be diversified away by investing in both COSTCO WHOLESALE and PLAYMATES TOYS 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 PLAYMATES TOYS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COSTCO WHOLESALE CDR and PLAYMATES TOYS, you can compare the effects of market volatilities on COSTCO WHOLESALE and PLAYMATES TOYS 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 PLAYMATES TOYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSTCO WHOLESALE and PLAYMATES TOYS.
Diversification Opportunities for COSTCO WHOLESALE and PLAYMATES TOYS
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between COSTCO and PLAYMATES is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding COSTCO WHOLESALE CDR and PLAYMATES TOYS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYMATES TOYS 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 CDR are associated (or correlated) with PLAYMATES TOYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYMATES TOYS has no effect on the direction of COSTCO WHOLESALE i.e., COSTCO WHOLESALE and PLAYMATES TOYS go up and down completely randomly.
Pair Corralation between COSTCO WHOLESALE and PLAYMATES TOYS
Assuming the 90 days trading horizon COSTCO WHOLESALE CDR is expected to generate 0.2 times more return on investment than PLAYMATES TOYS. However, COSTCO WHOLESALE CDR is 5.0 times less risky than PLAYMATES TOYS. It trades about 0.04 of its potential returns per unit of risk. PLAYMATES TOYS is currently generating about -0.05 per unit of risk. If you would invest 2,880 in COSTCO WHOLESALE CDR on October 25, 2024 and sell it today you would earn a total of 20.00 from holding COSTCO WHOLESALE CDR or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COSTCO WHOLESALE CDR vs. PLAYMATES TOYS
Performance |
| Timeline |
| COSTCO WHOLESALE CDR |
| PLAYMATES TOYS |
COSTCO WHOLESALE and PLAYMATES TOYS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSTCO WHOLESALE and PLAYMATES TOYS
The main advantage of trading using opposite COSTCO WHOLESALE and PLAYMATES TOYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSTCO WHOLESALE position performs unexpectedly, PLAYMATES TOYS 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 PLAYMATES TOYS will offset losses from the drop in PLAYMATES TOYS's long position.| COSTCO WHOLESALE vs. Compagnie Plastic Omnium | COSTCO WHOLESALE vs. Carnegie Clean Energy | COSTCO WHOLESALE vs. Aristocrat Leisure Limited | COSTCO WHOLESALE vs. Clean Energy Fuels |
| PLAYMATES TOYS vs. Iridium Communications | PLAYMATES TOYS vs. Spirent Communications plc | PLAYMATES TOYS vs. Cairo Communication SpA | PLAYMATES TOYS vs. CITIC Telecom International |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |