Correlation Between G2D Investments and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both G2D Investments 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 G2D Investments and Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G2D Investments and Costco Wholesale, you can compare the effects of market volatilities on G2D Investments 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 G2D Investments with a short position of Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of G2D Investments and Costco Wholesale.
Diversification Opportunities for G2D Investments and Costco Wholesale
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between G2D and Costco is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding G2D Investments and Costco Wholesale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costco Wholesale and G2D Investments 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 G2D Investments 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 G2D Investments i.e., G2D Investments and Costco Wholesale go up and down completely randomly.
Pair Corralation between G2D Investments and Costco Wholesale
Assuming the 90 days trading horizon G2D Investments is expected to under-perform the Costco Wholesale. In addition to that, G2D Investments is 1.22 times more volatile than Costco Wholesale. It trades about -0.13 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 12,726 in Costco Wholesale on August 31, 2024 and sell it today you would earn a total of 1,778 from holding Costco Wholesale or generate 13.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
G2D Investments vs. Costco Wholesale
Performance |
| Timeline |
| G2D Investments |
| Costco Wholesale |
G2D Investments and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G2D Investments and Costco Wholesale
The main advantage of trading using opposite G2D Investments and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G2D Investments 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.| G2D Investments vs. The Bank of | G2D Investments vs. Ameriprise Financial | G2D Investments vs. Banco BTG Pactual | G2D Investments vs. Banco BTG Pactual |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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