Correlation Between LESTE FDO and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both LESTE FDO 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 LESTE FDO and Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LESTE FDO INV and Costco Wholesale, you can compare the effects of market volatilities on LESTE FDO 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 LESTE FDO with a short position of Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of LESTE FDO and Costco Wholesale.
Diversification Opportunities for LESTE FDO and Costco Wholesale
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LESTE and Costco is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding LESTE FDO INV and Costco Wholesale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costco Wholesale and LESTE FDO 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 LESTE FDO INV 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 LESTE FDO i.e., LESTE FDO and Costco Wholesale go up and down completely randomly.
Pair Corralation between LESTE FDO and Costco Wholesale
Assuming the 90 days trading horizon LESTE FDO INV is expected to under-perform the Costco Wholesale. But the fund apears to be less risky and, when comparing its historical volatility, LESTE FDO INV is 1.04 times less risky than Costco Wholesale. The fund trades about -0.01 of its potential returns per unit of risk. The Costco Wholesale is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 5,813 in Costco Wholesale on September 13, 2024 and sell it today you would earn a total of 9,042 from holding Costco Wholesale or generate 155.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.0% |
| Values | Daily Returns |
LESTE FDO INV vs. Costco Wholesale
Performance |
| Timeline |
| LESTE FDO INV |
| Costco Wholesale |
LESTE FDO and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LESTE FDO and Costco Wholesale
The main advantage of trading using opposite LESTE FDO and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LESTE FDO 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.| LESTE FDO vs. Brio Multiestrategi Fundo | LESTE FDO vs. HEDGE SEED FUNDO | LESTE FDO vs. XP Hoteis Fundo | LESTE FDO vs. EXES FUNDO DE |
| Costco Wholesale vs. Fundo Investimento Imobiliario | Costco Wholesale vs. LESTE FDO INV | Costco Wholesale vs. Fras le SA | Costco Wholesale vs. Western Digital |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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