Correlation Between COSTCO WHOLESALE and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both COSTCO WHOLESALE and Samsung Electronics 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 Samsung Electronics 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 Samsung Electronics Co, you can compare the effects of market volatilities on COSTCO WHOLESALE and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSTCO WHOLESALE and Samsung Electronics.
Diversification Opportunities for COSTCO WHOLESALE and Samsung Electronics
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between COSTCO and Samsung is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding COSTCO WHOLESALE CDR and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of COSTCO WHOLESALE i.e., COSTCO WHOLESALE and Samsung Electronics go up and down completely randomly.
Pair Corralation between COSTCO WHOLESALE and Samsung Electronics
Assuming the 90 days trading horizon COSTCO WHOLESALE CDR is expected to generate 0.76 times more return on investment than Samsung Electronics. However, COSTCO WHOLESALE CDR is 1.31 times less risky than Samsung Electronics. It trades about -0.04 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.32 per unit of risk. If you would invest 2,980 in COSTCO WHOLESALE CDR on September 23, 2024 and sell it today you would lose (40.00) from holding COSTCO WHOLESALE CDR or give up 1.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COSTCO WHOLESALE CDR vs. Samsung Electronics Co
Performance |
| Timeline |
| COSTCO WHOLESALE CDR |
| Samsung Electronics |
COSTCO WHOLESALE and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSTCO WHOLESALE and Samsung Electronics
The main advantage of trading using opposite COSTCO WHOLESALE and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSTCO WHOLESALE position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| COSTCO WHOLESALE vs. LEGACY IRON ORE | COSTCO WHOLESALE vs. CECO ENVIRONMENTAL | COSTCO WHOLESALE vs. BlueScope Steel Limited | COSTCO WHOLESALE vs. United States Steel |
| Samsung Electronics vs. Fast Retailing Co | Samsung Electronics vs. Diamyd Medical AB | Samsung Electronics vs. CSSC Offshore Marine | Samsung Electronics 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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