Correlation Between TRADEGATE and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both TRADEGATE 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 TRADEGATE and Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRADEGATE and Costco Wholesale Corp, you can compare the effects of market volatilities on TRADEGATE 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 TRADEGATE with a short position of Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRADEGATE and Costco Wholesale.
Diversification Opportunities for TRADEGATE and Costco Wholesale
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TRADEGATE and Costco is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding TRADEGATE 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 TRADEGATE 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 TRADEGATE 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 TRADEGATE i.e., TRADEGATE and Costco Wholesale go up and down completely randomly.
Pair Corralation between TRADEGATE and Costco Wholesale
Assuming the 90 days trading horizon TRADEGATE is expected to under-perform the Costco Wholesale. But the stock apears to be less risky and, when comparing its historical volatility, TRADEGATE is 1.06 times less risky than Costco Wholesale. The stock trades about -0.08 of its potential returns per unit of risk. The Costco Wholesale Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 66,985 in Costco Wholesale Corp on October 14, 2024 and sell it today you would earn a total of 23,695 from holding Costco Wholesale Corp or generate 35.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRADEGATE vs. Costco Wholesale Corp
Performance |
| Timeline |
| TRADEGATE |
| Costco Wholesale Corp |
TRADEGATE and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRADEGATE and Costco Wholesale
The main advantage of trading using opposite TRADEGATE and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRADEGATE 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.| TRADEGATE vs. SYSTEMAIR AB | TRADEGATE vs. alstria office REIT AG | TRADEGATE vs. WIZZ AIR HLDGUNSPADR4 | TRADEGATE vs. Alaska Air Group |
| Costco Wholesale vs. Sunny Optical Technology | Costco Wholesale vs. TRADEGATE | Costco Wholesale vs. Firan Technology Group | Costco Wholesale vs. The Trade Desk |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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