Correlation Between COSTCO WHOLESALE and MAVEN WIRELESS

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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 Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy98.46%
ValuesDaily Returns

COSTCO WHOLESALE CDR  vs.  MAVEN WIRELESS SWEDEN

 Performance 
       Timeline  
COSTCO WHOLESALE CDR 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in COSTCO WHOLESALE CDR are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, COSTCO WHOLESALE may actually be approaching a critical reversion point that can send shares even higher in December 2024.
MAVEN WIRELESS SWEDEN 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days MAVEN WIRELESS SWEDEN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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.
The idea behind COSTCO WHOLESALE CDR and MAVEN WIRELESS SWEDEN pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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