Correlation Between COSTCO WHOLESALE and DATAGROUP
Can any of the company-specific risk be diversified away by investing in both COSTCO WHOLESALE and DATAGROUP 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 DATAGROUP 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 DATAGROUP SE, you can compare the effects of market volatilities on COSTCO WHOLESALE and DATAGROUP 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 DATAGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSTCO WHOLESALE and DATAGROUP.
Diversification Opportunities for COSTCO WHOLESALE and DATAGROUP
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between COSTCO and DATAGROUP is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding COSTCO WHOLESALE CDR and DATAGROUP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATAGROUP SE 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 DATAGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATAGROUP SE has no effect on the direction of COSTCO WHOLESALE i.e., COSTCO WHOLESALE and DATAGROUP go up and down completely randomly.
Pair Corralation between COSTCO WHOLESALE and DATAGROUP
Assuming the 90 days trading horizon COSTCO WHOLESALE CDR is expected to generate 0.75 times more return on investment than DATAGROUP. However, COSTCO WHOLESALE CDR is 1.34 times less risky than DATAGROUP. It trades about 0.09 of its potential returns per unit of risk. DATAGROUP SE is currently generating about -0.02 per unit of risk. If you would invest 1,517 in COSTCO WHOLESALE CDR on September 3, 2024 and sell it today you would earn a total of 1,443 from holding COSTCO WHOLESALE CDR or generate 95.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COSTCO WHOLESALE CDR vs. DATAGROUP SE
Performance |
| Timeline |
| COSTCO WHOLESALE CDR |
| DATAGROUP SE |
COSTCO WHOLESALE and DATAGROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSTCO WHOLESALE and DATAGROUP
The main advantage of trading using opposite COSTCO WHOLESALE and DATAGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSTCO WHOLESALE position performs unexpectedly, DATAGROUP 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 DATAGROUP will offset losses from the drop in DATAGROUP's long position.| COSTCO WHOLESALE vs. Walmart | COSTCO WHOLESALE vs. Superior Plus Corp | COSTCO WHOLESALE vs. NMI Holdings | COSTCO WHOLESALE vs. Origin Agritech |
| DATAGROUP vs. VIRGIN WINES UK | DATAGROUP vs. Marie Brizard Wine | DATAGROUP vs. Microchip Technology Incorporated | DATAGROUP vs. CHINA TONTINE WINES |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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