Correlation Between SEALED AIR and COSTCO WHOLESALE
Can any of the company-specific risk be diversified away by investing in both SEALED AIR 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 SEALED AIR and COSTCO WHOLESALE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEALED AIR and COSTCO WHOLESALE CDR, you can compare the effects of market volatilities on SEALED AIR 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 SEALED AIR with a short position of COSTCO WHOLESALE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEALED AIR and COSTCO WHOLESALE.
Diversification Opportunities for SEALED AIR and COSTCO WHOLESALE
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SEALED and COSTCO is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding SEALED AIR and COSTCO WHOLESALE CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSTCO WHOLESALE CDR and SEALED AIR 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 SEALED AIR 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 CDR has no effect on the direction of SEALED AIR i.e., SEALED AIR and COSTCO WHOLESALE go up and down completely randomly.
Pair Corralation between SEALED AIR and COSTCO WHOLESALE
Assuming the 90 days trading horizon SEALED AIR is expected to generate 3.21 times less return on investment than COSTCO WHOLESALE. In addition to that, SEALED AIR is 1.08 times more volatile than COSTCO WHOLESALE CDR. It trades about 0.02 of its total potential returns per unit of risk. COSTCO WHOLESALE CDR is currently generating about 0.07 per unit of volatility. If you would invest 2,206 in COSTCO WHOLESALE CDR on October 29, 2024 and sell it today you would earn a total of 654.00 from holding COSTCO WHOLESALE CDR or generate 29.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEALED AIR vs. COSTCO WHOLESALE CDR
Performance |
| Timeline |
| SEALED AIR |
| COSTCO WHOLESALE CDR |
SEALED AIR and COSTCO WHOLESALE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEALED AIR and COSTCO WHOLESALE
The main advantage of trading using opposite SEALED AIR and COSTCO WHOLESALE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEALED AIR 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.| SEALED AIR vs. REINET INVESTMENTS SCA | SEALED AIR vs. High Liner Foods | SEALED AIR vs. US FOODS HOLDING | SEALED AIR vs. PATTIES FOODS |
| COSTCO WHOLESALE vs. Phibro Animal Health | COSTCO WHOLESALE vs. RCI Hospitality Holdings | COSTCO WHOLESALE vs. WESANA HEALTH HOLD | COSTCO WHOLESALE vs. Ameriprise 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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