Correlation Between COSTCO WHOLESALE and BRAGG GAMING
Can any of the company-specific risk be diversified away by investing in both COSTCO WHOLESALE and BRAGG GAMING 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 BRAGG GAMING 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 BRAGG GAMING GRP, you can compare the effects of market volatilities on COSTCO WHOLESALE and BRAGG GAMING 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 BRAGG GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSTCO WHOLESALE and BRAGG GAMING.
Diversification Opportunities for COSTCO WHOLESALE and BRAGG GAMING
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between COSTCO and BRAGG is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding COSTCO WHOLESALE CDR and BRAGG GAMING GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRAGG GAMING GRP 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 BRAGG GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRAGG GAMING GRP has no effect on the direction of COSTCO WHOLESALE i.e., COSTCO WHOLESALE and BRAGG GAMING go up and down completely randomly.
Pair Corralation between COSTCO WHOLESALE and BRAGG GAMING
Assuming the 90 days trading horizon COSTCO WHOLESALE is expected to generate 24.13 times less return on investment than BRAGG GAMING. But when comparing it to its historical volatility, COSTCO WHOLESALE CDR is 3.84 times less risky than BRAGG GAMING. It trades about 0.04 of its potential returns per unit of risk. BRAGG GAMING GRP is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 334.00 in BRAGG GAMING GRP on October 25, 2024 and sell it today you would earn a total of 66.00 from holding BRAGG GAMING GRP or generate 19.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COSTCO WHOLESALE CDR vs. BRAGG GAMING GRP
Performance |
| Timeline |
| COSTCO WHOLESALE CDR |
| BRAGG GAMING GRP |
COSTCO WHOLESALE and BRAGG GAMING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSTCO WHOLESALE and BRAGG GAMING
The main advantage of trading using opposite COSTCO WHOLESALE and BRAGG GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSTCO WHOLESALE position performs unexpectedly, BRAGG GAMING 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 BRAGG GAMING will offset losses from the drop in BRAGG GAMING's long position.| COSTCO WHOLESALE vs. Compagnie Plastic Omnium | COSTCO WHOLESALE vs. Carnegie Clean Energy | COSTCO WHOLESALE vs. Aristocrat Leisure Limited | COSTCO WHOLESALE vs. Clean Energy Fuels |
| BRAGG GAMING vs. Apollo Investment Corp | BRAGG GAMING vs. LPKF Laser Electronics | BRAGG GAMING vs. AGNC INVESTMENT | BRAGG GAMING vs. New Residential Investment |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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