Correlation Between Energisa and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both Energisa 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 Energisa and Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energisa SA and Costco Wholesale, you can compare the effects of market volatilities on Energisa 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 Energisa with a short position of Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisa and Costco Wholesale.
Diversification Opportunities for Energisa and Costco Wholesale
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Energisa and Costco is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and Costco Wholesale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costco Wholesale and Energisa 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 Energisa SA 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 has no effect on the direction of Energisa i.e., Energisa and Costco Wholesale go up and down completely randomly.
Pair Corralation between Energisa and Costco Wholesale
Assuming the 90 days trading horizon Energisa SA is expected to under-perform the Costco Wholesale. In addition to that, Energisa is 1.08 times more volatile than Costco Wholesale. It trades about -0.1 of its total potential returns per unit of risk. Costco Wholesale is currently generating about 0.38 per unit of volatility. If you would invest 12,838 in Costco Wholesale on September 2, 2024 and sell it today you would earn a total of 1,784 from holding Costco Wholesale or generate 13.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energisa SA vs. Costco Wholesale
Performance |
| Timeline |
| Energisa SA |
| Costco Wholesale |
Energisa and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energisa and Costco Wholesale
The main advantage of trading using opposite Energisa and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energisa 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.| Energisa vs. Equatorial Energia SA | Energisa vs. CPFL Energia SA | Energisa vs. Eneva SA | Energisa vs. Companhia de Saneamento |
| Costco Wholesale vs. Paycom Software | Costco Wholesale vs. Monster Beverage | Costco Wholesale vs. Livetech da Bahia | Costco Wholesale vs. Technos SA |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |