Correlation Between Enghouse Systems and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both Enghouse Systems 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 Enghouse Systems and Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enghouse Systems and Costco Wholesale Corp, you can compare the effects of market volatilities on Enghouse Systems 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 Enghouse Systems with a short position of Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enghouse Systems and Costco Wholesale.
Diversification Opportunities for Enghouse Systems and Costco Wholesale
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Enghouse and Costco is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Enghouse Systems 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 Enghouse Systems 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 Enghouse Systems 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 Enghouse Systems i.e., Enghouse Systems and Costco Wholesale go up and down completely randomly.
Pair Corralation between Enghouse Systems and Costco Wholesale
Assuming the 90 days trading horizon Enghouse Systems is expected to generate 7.37 times less return on investment than Costco Wholesale. In addition to that, Enghouse Systems is 1.74 times more volatile than Costco Wholesale Corp. It trades about 0.01 of its total potential returns per unit of risk. Costco Wholesale Corp is currently generating about 0.12 per unit of volatility. If you would invest 2,243 in Costco Wholesale Corp on August 24, 2024 and sell it today you would earn a total of 2,227 from holding Costco Wholesale Corp or generate 99.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enghouse Systems vs. Costco Wholesale Corp
Performance |
| Timeline |
| Enghouse Systems |
| Costco Wholesale Corp |
Enghouse Systems and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enghouse Systems and Costco Wholesale
The main advantage of trading using opposite Enghouse Systems and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enghouse Systems 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.| Enghouse Systems vs. Kinaxis | Enghouse Systems vs. Open Text Corp | Enghouse Systems vs. Descartes Systems Group | Enghouse Systems vs. Constellation Software |
| Costco Wholesale vs. Restaurant Brands International | Costco Wholesale vs. Enghouse Systems | Costco Wholesale vs. Metro Inc | Costco Wholesale vs. goeasy |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |