Correlation Between COSTCO WHOLESALE and MAVEN WIRELESS
Can any of the company-specific risk be diversified away by investing in both COSTCO WHOLESALE and MAVEN WIRELESS 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 MAVEN WIRELESS 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 MAVEN WIRELESS SWEDEN, you can compare the effects of market volatilities on COSTCO WHOLESALE and MAVEN WIRELESS 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 MAVEN WIRELESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSTCO WHOLESALE and MAVEN WIRELESS.
Diversification Opportunities for COSTCO WHOLESALE and MAVEN WIRELESS
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between COSTCO and MAVEN is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding COSTCO WHOLESALE CDR and MAVEN WIRELESS SWEDEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAVEN WIRELESS SWEDEN 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 MAVEN WIRELESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAVEN WIRELESS SWEDEN has no effect on the direction of COSTCO WHOLESALE i.e., COSTCO WHOLESALE and MAVEN WIRELESS go up and down completely randomly.
Pair Corralation between COSTCO WHOLESALE and MAVEN WIRELESS
Assuming the 90 days trading horizon COSTCO WHOLESALE CDR is expected to generate 0.62 times more return on investment than MAVEN WIRELESS. However, COSTCO WHOLESALE CDR is 1.61 times less risky than MAVEN WIRELESS. It trades about 0.1 of its potential returns per unit of risk. MAVEN WIRELESS SWEDEN is currently generating about -0.14 per unit of risk. If you would invest 2,734 in COSTCO WHOLESALE CDR on August 29, 2024 and sell it today you would earn a total of 266.00 from holding COSTCO WHOLESALE CDR or generate 9.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.46% |
Values | Daily Returns |
COSTCO WHOLESALE CDR vs. MAVEN WIRELESS SWEDEN
Performance |
Timeline |
COSTCO WHOLESALE CDR |
MAVEN WIRELESS SWEDEN |
COSTCO WHOLESALE and MAVEN WIRELESS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with COSTCO WHOLESALE and MAVEN WIRELESS
The main advantage of trading using opposite COSTCO WHOLESALE and MAVEN WIRELESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSTCO WHOLESALE position performs unexpectedly, MAVEN WIRELESS 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 MAVEN WIRELESS will offset losses from the drop in MAVEN WIRELESS's long position.COSTCO WHOLESALE vs. Walmart | COSTCO WHOLESALE vs. Walmart | COSTCO WHOLESALE vs. Costco Wholesale | COSTCO WHOLESALE vs. Target |
MAVEN WIRELESS vs. Verizon Communications | MAVEN WIRELESS vs. ATT Inc | MAVEN WIRELESS vs. ATT Inc | MAVEN WIRELESS vs. Deutsche Telekom AG |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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