Correlation Between COSTCO WHOLESALE and PT Bank
Can any of the company-specific risk be diversified away by investing in both COSTCO WHOLESALE and PT Bank 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 PT Bank 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 PT Bank Rakyat, you can compare the effects of market volatilities on COSTCO WHOLESALE and PT Bank 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 PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSTCO WHOLESALE and PT Bank.
Diversification Opportunities for COSTCO WHOLESALE and PT Bank
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between COSTCO and BYRA is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding COSTCO WHOLESALE CDR and PT Bank Rakyat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Rakyat 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 PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Rakyat has no effect on the direction of COSTCO WHOLESALE i.e., COSTCO WHOLESALE and PT Bank go up and down completely randomly.
Pair Corralation between COSTCO WHOLESALE and PT Bank
Assuming the 90 days trading horizon COSTCO WHOLESALE CDR is expected to generate 0.76 times more return on investment than PT Bank. However, COSTCO WHOLESALE CDR is 1.32 times less risky than PT Bank. It trades about 0.26 of its potential returns per unit of risk. PT Bank Rakyat is currently generating about -0.2 per unit of risk. If you would invest 2,695 in COSTCO WHOLESALE CDR on August 30, 2024 and sell it today you would earn a total of 285.00 from holding COSTCO WHOLESALE CDR or generate 10.58% 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. PT Bank Rakyat
Performance |
| Timeline |
| COSTCO WHOLESALE CDR |
| PT Bank Rakyat |
COSTCO WHOLESALE and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSTCO WHOLESALE and PT Bank
The main advantage of trading using opposite COSTCO WHOLESALE and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSTCO WHOLESALE position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.| COSTCO WHOLESALE vs. Bausch Health Companies | COSTCO WHOLESALE vs. DiamondRock Hospitality | COSTCO WHOLESALE vs. EPSILON HEALTHCARE LTD | COSTCO WHOLESALE vs. HEALTHCARE REAL A |
| PT Bank vs. QURATE RETAIL INC | PT Bank vs. COSTCO WHOLESALE CDR | PT Bank vs. MITSUBISHI STEEL MFG | PT Bank vs. Lion One Metals |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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