Correlation Between Companhia Siderrgica and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both Companhia Siderrgica 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 Companhia Siderrgica and Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Companhia Siderrgica Nacional and Costco Wholesale, you can compare the effects of market volatilities on Companhia Siderrgica 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 Companhia Siderrgica with a short position of Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Siderrgica and Costco Wholesale.
Diversification Opportunities for Companhia Siderrgica and Costco Wholesale
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Companhia and Costco is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Siderrgica Nacional and Costco Wholesale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costco Wholesale and Companhia Siderrgica 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 Companhia Siderrgica Nacional 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 Companhia Siderrgica i.e., Companhia Siderrgica and Costco Wholesale go up and down completely randomly.
Pair Corralation between Companhia Siderrgica and Costco Wholesale
Assuming the 90 days trading horizon Companhia Siderrgica Nacional is expected to under-perform the Costco Wholesale. In addition to that, Companhia Siderrgica is 1.54 times more volatile than Costco Wholesale. It trades about -0.11 of its total potential returns per unit of risk. Costco Wholesale is currently generating about 0.28 per unit of volatility. If you would invest 1,772,850 in Costco Wholesale on August 31, 2024 and sell it today you would earn a total of 207,650 from holding Costco Wholesale or generate 11.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Companhia Siderrgica Nacional vs. Costco Wholesale
Performance |
| Timeline |
| Companhia Siderrgica |
| Costco Wholesale |
Companhia Siderrgica and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Siderrgica and Costco Wholesale
The main advantage of trading using opposite Companhia Siderrgica and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Siderrgica 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.| Companhia Siderrgica vs. Lloyds Banking Group | Companhia Siderrgica vs. Costco Wholesale | Companhia Siderrgica vs. FibraHotel | Companhia Siderrgica vs. Prudential Financial |
| Costco Wholesale vs. Verizon Communications | Costco Wholesale vs. First Republic Bank | Costco Wholesale vs. First Majestic Silver | Costco Wholesale vs. Monster Beverage Corp |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |