Correlation Between Ensign and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both Ensign and Costco Wholesale 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 Ensign and Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Ensign Group and Costco Wholesale Corp, you can compare the effects of market volatilities on Ensign and Costco Wholesale 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 Ensign with a short position of Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ensign and Costco Wholesale.
Diversification Opportunities for Ensign and Costco Wholesale
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ensign and Costco is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding The Ensign Group and Costco Wholesale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costco Wholesale Corp and Ensign 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 The Ensign Group are associated (or correlated) with Costco Wholesale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Costco Wholesale Corp has no effect on the direction of Ensign i.e., Ensign and Costco Wholesale go up and down completely randomly.
Pair Corralation between Ensign and Costco Wholesale
Assuming the 90 days horizon Ensign is expected to generate 1.37 times less return on investment than Costco Wholesale. In addition to that, Ensign is 1.13 times more volatile than Costco Wholesale Corp. It trades about 0.18 of its total potential returns per unit of risk. Costco Wholesale Corp is currently generating about 0.28 per unit of volatility. If you would invest 89,030 in Costco Wholesale Corp on November 6, 2024 and sell it today you would earn a total of 5,910 from holding Costco Wholesale Corp or generate 6.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Ensign Group vs. Costco Wholesale Corp
Performance |
| Timeline |
| Ensign Group |
| Costco Wholesale Corp |
Ensign and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ensign and Costco Wholesale
The main advantage of trading using opposite Ensign and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ensign position performs unexpectedly, Costco Wholesale 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 Costco Wholesale will offset losses from the drop in Costco Wholesale's long position.| Ensign vs. EPSILON HEALTHCARE LTD | Ensign vs. Corsair Gaming | Ensign vs. RCI Hospitality Holdings | Ensign vs. SOGECLAIR SA INH |
| Costco Wholesale vs. East Africa Metals | Costco Wholesale vs. FIREWEED METALS P | Costco Wholesale vs. MAGNUM MINING EXP | Costco Wholesale vs. GREENX METALS LTD |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |