Correlation Between Ollies Bargain and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both Ollies Bargain 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 Ollies Bargain and Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ollies Bargain Outlet and Costco Wholesale Corp, you can compare the effects of market volatilities on Ollies Bargain 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 Ollies Bargain with a short position of Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ollies Bargain and Costco Wholesale.
Diversification Opportunities for Ollies Bargain and Costco Wholesale
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ollies and Costco is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ollies Bargain Outlet 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 Ollies Bargain 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 Ollies Bargain Outlet 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 Ollies Bargain i.e., Ollies Bargain and Costco Wholesale go up and down completely randomly.
Pair Corralation between Ollies Bargain and Costco Wholesale
Given the investment horizon of 90 days Ollies Bargain Outlet is expected to generate 2.02 times more return on investment than Costco Wholesale. However, Ollies Bargain is 2.02 times more volatile than Costco Wholesale Corp. It trades about 0.2 of its potential returns per unit of risk. Costco Wholesale Corp is currently generating about 0.34 per unit of risk. If you would invest 9,090 in Ollies Bargain Outlet on August 31, 2024 and sell it today you would earn a total of 1,019 from holding Ollies Bargain Outlet or generate 11.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ollies Bargain Outlet vs. Costco Wholesale Corp
Performance |
| Timeline |
| Ollies Bargain Outlet |
| Costco Wholesale Corp |
Ollies Bargain and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ollies Bargain and Costco Wholesale
The main advantage of trading using opposite Ollies Bargain and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ollies Bargain 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.| Ollies Bargain vs. Dollar Tree | Ollies Bargain vs. BJs Wholesale Club | Ollies Bargain vs. Dollar General | Ollies Bargain vs. Costco Wholesale Corp |
| Costco Wholesale vs. Walmart | Costco Wholesale vs. Dollar Tree | Costco Wholesale vs. BJs Wholesale Club | Costco Wholesale vs. Target |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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