Correlation Between COSTCO WHOLESALE and Graphic Packaging
Can any of the company-specific risk be diversified away by investing in both COSTCO WHOLESALE and Graphic Packaging 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 Graphic Packaging 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 Graphic Packaging Holding, you can compare the effects of market volatilities on COSTCO WHOLESALE and Graphic Packaging 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 Graphic Packaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSTCO WHOLESALE and Graphic Packaging.
Diversification Opportunities for COSTCO WHOLESALE and Graphic Packaging
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between COSTCO and Graphic is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding COSTCO WHOLESALE CDR and Graphic Packaging Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphic Packaging Holding 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 Graphic Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphic Packaging Holding has no effect on the direction of COSTCO WHOLESALE i.e., COSTCO WHOLESALE and Graphic Packaging go up and down completely randomly.
Pair Corralation between COSTCO WHOLESALE and Graphic Packaging
Assuming the 90 days trading horizon COSTCO WHOLESALE CDR is expected to generate 1.51 times more return on investment than Graphic Packaging. However, COSTCO WHOLESALE is 1.51 times more volatile than Graphic Packaging Holding. It trades about 0.18 of its potential returns per unit of risk. Graphic Packaging Holding is currently generating about 0.2 per unit of risk. If you would invest 2,920 in COSTCO WHOLESALE CDR on September 15, 2024 and sell it today you would earn a total of 180.00 from holding COSTCO WHOLESALE CDR or generate 6.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COSTCO WHOLESALE CDR vs. Graphic Packaging Holding
Performance |
| Timeline |
| COSTCO WHOLESALE CDR |
| Graphic Packaging Holding |
COSTCO WHOLESALE and Graphic Packaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSTCO WHOLESALE and Graphic Packaging
The main advantage of trading using opposite COSTCO WHOLESALE and Graphic Packaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSTCO WHOLESALE position performs unexpectedly, Graphic Packaging 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 Graphic Packaging will offset losses from the drop in Graphic Packaging's long position.| COSTCO WHOLESALE vs. AXWAY SOFTWARE EO | COSTCO WHOLESALE vs. CHINA EDUCATION GROUP | COSTCO WHOLESALE vs. VITEC SOFTWARE GROUP | COSTCO WHOLESALE vs. Alfa Financial Software |
| Graphic Packaging vs. MARKET VECTR RETAIL | Graphic Packaging vs. COSTCO WHOLESALE CDR | Graphic Packaging vs. FORMPIPE SOFTWARE AB | Graphic Packaging vs. BJs Wholesale Club |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |