Correlation Between Meiwu Technology and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both Meiwu Technology 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 Meiwu Technology and Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meiwu Technology Co and Costco Wholesale Corp, you can compare the effects of market volatilities on Meiwu Technology 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 Meiwu Technology with a short position of Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiwu Technology and Costco Wholesale.
Diversification Opportunities for Meiwu Technology and Costco Wholesale
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Meiwu and Costco is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Meiwu Technology Co 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 Meiwu Technology 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 Meiwu Technology Co 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 Meiwu Technology i.e., Meiwu Technology and Costco Wholesale go up and down completely randomly.
Pair Corralation between Meiwu Technology and Costco Wholesale
Considering the 90-day investment horizon Meiwu Technology Co is expected to generate 5.77 times more return on investment than Costco Wholesale. However, Meiwu Technology is 5.77 times more volatile than Costco Wholesale Corp. It trades about 0.61 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 82.00 in Meiwu Technology Co on September 18, 2024 and sell it today you would earn a total of 76.00 from holding Meiwu Technology Co or generate 92.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiwu Technology Co vs. Costco Wholesale Corp
Performance |
| Timeline |
| Meiwu Technology |
| Costco Wholesale Corp |
Meiwu Technology and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiwu Technology and Costco Wholesale
The main advantage of trading using opposite Meiwu Technology and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiwu Technology 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.| Meiwu Technology vs. MOGU Inc | Meiwu Technology vs. iPower Inc | Meiwu Technology vs. Jeffs Brands | Meiwu Technology vs. Kidpik 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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