Correlation Between COSTCO WHOLESALE and TELE2 -B-
Can any of the company-specific risk be diversified away by investing in both COSTCO WHOLESALE and TELE2 -B- 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 TELE2 -B- 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 TELE2 B , you can compare the effects of market volatilities on COSTCO WHOLESALE and TELE2 -B- 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 TELE2 -B-. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSTCO WHOLESALE and TELE2 -B-.
Diversification Opportunities for COSTCO WHOLESALE and TELE2 -B-
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between COSTCO and TELE2 is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding COSTCO WHOLESALE CDR and TELE2 B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELE2 -B- 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 TELE2 -B-. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TELE2 -B- has no effect on the direction of COSTCO WHOLESALE i.e., COSTCO WHOLESALE and TELE2 -B- go up and down completely randomly.
Pair Corralation between COSTCO WHOLESALE and TELE2 -B-
Assuming the 90 days trading horizon COSTCO WHOLESALE CDR is expected to under-perform the TELE2 -B-. But the stock apears to be less risky and, when comparing its historical volatility, COSTCO WHOLESALE CDR is 1.18 times less risky than TELE2 -B-. The stock trades about -0.28 of its potential returns per unit of risk. The TELE2 B is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 968.00 in TELE2 B on October 13, 2024 and sell it today you would lose (42.00) from holding TELE2 B or give up 4.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
COSTCO WHOLESALE CDR vs. TELE2 B
Performance |
| Timeline |
| COSTCO WHOLESALE CDR |
| TELE2 -B- |
COSTCO WHOLESALE and TELE2 -B- Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSTCO WHOLESALE and TELE2 -B-
The main advantage of trading using opposite COSTCO WHOLESALE and TELE2 -B- positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSTCO WHOLESALE position performs unexpectedly, TELE2 -B- 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 TELE2 -B- will offset losses from the drop in TELE2 -B-'s long position.| COSTCO WHOLESALE vs. SOFI TECHNOLOGIES | COSTCO WHOLESALE vs. Astral Foods Limited | COSTCO WHOLESALE vs. EBRO FOODS | COSTCO WHOLESALE vs. ASPEN TECHINC DL |
| TELE2 -B- vs. Caseys General Stores | TELE2 -B- vs. BURLINGTON STORES | TELE2 -B- vs. COSTCO WHOLESALE CDR | TELE2 -B- vs. Retail Estates NV |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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