Correlation Between COSTCO WHOLESALE and ANTA SPORTS
Can any of the company-specific risk be diversified away by investing in both COSTCO WHOLESALE and ANTA SPORTS 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 ANTA SPORTS 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 ANTA SPORTS PRODUCT, you can compare the effects of market volatilities on COSTCO WHOLESALE and ANTA SPORTS 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 ANTA SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSTCO WHOLESALE and ANTA SPORTS.
Diversification Opportunities for COSTCO WHOLESALE and ANTA SPORTS
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COSTCO and ANTA is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding COSTCO WHOLESALE CDR and ANTA SPORTS PRODUCT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA SPORTS PRODUCT 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 ANTA SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTA SPORTS PRODUCT has no effect on the direction of COSTCO WHOLESALE i.e., COSTCO WHOLESALE and ANTA SPORTS go up and down completely randomly.
Pair Corralation between COSTCO WHOLESALE and ANTA SPORTS
Assuming the 90 days trading horizon COSTCO WHOLESALE CDR is expected to under-perform the ANTA SPORTS. But the stock apears to be less risky and, when comparing its historical volatility, COSTCO WHOLESALE CDR is 1.48 times less risky than ANTA SPORTS. The stock trades about -0.22 of its potential returns per unit of risk. The ANTA SPORTS PRODUCT is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 1,000.00 in ANTA SPORTS PRODUCT on October 14, 2024 and sell it today you would lose (42.00) from holding ANTA SPORTS PRODUCT or give up 4.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COSTCO WHOLESALE CDR vs. ANTA SPORTS PRODUCT
Performance |
| Timeline |
| COSTCO WHOLESALE CDR |
| ANTA SPORTS PRODUCT |
COSTCO WHOLESALE and ANTA SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSTCO WHOLESALE and ANTA SPORTS
The main advantage of trading using opposite COSTCO WHOLESALE and ANTA SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSTCO WHOLESALE position performs unexpectedly, ANTA SPORTS 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 ANTA SPORTS will offset losses from the drop in ANTA SPORTS's long position.| COSTCO WHOLESALE vs. Perdoceo Education | COSTCO WHOLESALE vs. QINGCI GAMES INC | COSTCO WHOLESALE vs. CONTAGIOUS GAMING INC | COSTCO WHOLESALE vs. Media and Games |
| ANTA SPORTS vs. Forsys Metals Corp | ANTA SPORTS vs. PICKN PAY STORES | ANTA SPORTS vs. BJs Wholesale Club | ANTA SPORTS vs. COSTCO WHOLESALE CDR |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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