Correlation Between DAX Index and Costco Wholesale
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By analyzing existing cross correlation between DAX Index and Costco Wholesale Corp, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Costco Wholesale.
Diversification Opportunities for DAX Index and Costco Wholesale
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DAX and Costco is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index 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 DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and Costco Wholesale go up and down completely randomly.
Pair Corralation between DAX Index and Costco Wholesale
Assuming the 90 days trading horizon DAX Index is expected to generate 3.27 times less return on investment than Costco Wholesale. But when comparing it to its historical volatility, DAX Index is 1.79 times less risky than Costco Wholesale. It trades about 0.08 of its potential returns per unit of risk. Costco Wholesale Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 47,744 in Costco Wholesale Corp on August 28, 2024 and sell it today you would earn a total of 43,156 from holding Costco Wholesale Corp or generate 90.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Costco Wholesale Corp
Performance |
| Timeline |
DAX Index and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Costco Wholesale Corp
Pair trading matchups for Costco Wholesale
Pair Trading with DAX Index and Costco Wholesale
The main advantage of trading using opposite DAX Index and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.| DAX Index vs. ELMOS SEMICONDUCTOR | DAX Index vs. ALTAIR RES INC | DAX Index vs. Fair Isaac Corp | DAX Index vs. Taiwan Semiconductor Manufacturing |
| Costco Wholesale vs. Apple Inc | Costco Wholesale vs. Apple Inc | Costco Wholesale vs. Microsoft | Costco Wholesale vs. Microsoft |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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