Correlation Between First Majestic and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both First Majestic 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 First Majestic and Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Majestic Silver and Costco Wholesale, you can compare the effects of market volatilities on First Majestic 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 First Majestic with a short position of Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Costco Wholesale.
Diversification Opportunities for First Majestic and Costco Wholesale
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Costco is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Costco Wholesale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costco Wholesale and First Majestic 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 First Majestic Silver 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 First Majestic i.e., First Majestic and Costco Wholesale go up and down completely randomly.
Pair Corralation between First Majestic and Costco Wholesale
Assuming the 90 days horizon First Majestic Silver is expected to under-perform the Costco Wholesale. But the stock apears to be less risky and, when comparing its historical volatility, First Majestic Silver is 2.69 times less risky than Costco Wholesale. The stock trades about -0.25 of its potential returns per unit of risk. The Costco Wholesale is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,792,422 in Costco Wholesale on August 24, 2024 and sell it today you would earn a total of 157,478 from holding Costco Wholesale or generate 8.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Costco Wholesale
Performance |
| Timeline |
| First Majestic Silver |
| Costco Wholesale |
First Majestic and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Costco Wholesale
The main advantage of trading using opposite First Majestic and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic 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.| First Majestic vs. Visa Inc | First Majestic vs. Desarrolladora Homex SAB | First Majestic vs. CMR SAB de | First Majestic vs. The Select Sector |
| Costco Wholesale vs. Grupo Sports World | Costco Wholesale vs. Burlington Stores | Costco Wholesale vs. Capital One Financial | Costco Wholesale vs. Genworth Financial |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |