Correlation Between 111 and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both 111 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 111 and Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 111 Inc and Costco Wholesale Corp, you can compare the effects of market volatilities on 111 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 111 with a short position of Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of 111 and Costco Wholesale.
Diversification Opportunities for 111 and Costco Wholesale
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 111 and Costco is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding 111 Inc 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 111 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 111 Inc 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 111 i.e., 111 and Costco Wholesale go up and down completely randomly.
Pair Corralation between 111 and Costco Wholesale
Allowing for the 90-day total investment horizon 111 Inc is expected to under-perform the Costco Wholesale. In addition to that, 111 is 2.76 times more volatile than Costco Wholesale Corp. It trades about -0.33 of its total potential returns per unit of risk. Costco Wholesale Corp is currently generating about 0.22 per unit of volatility. If you would invest 89,798 in Costco Wholesale Corp on August 24, 2024 and sell it today you would earn a total of 5,767 from holding Costco Wholesale Corp or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
111 Inc vs. Costco Wholesale Corp
Performance |
| Timeline |
| 111 Inc |
| Costco Wholesale Corp |
111 and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 111 and Costco Wholesale
The main advantage of trading using opposite 111 and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 111 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.| 111 vs. Walgreens Boots Alliance | 111 vs. PetMed Express | 111 vs. China Jo Jo Drugstores | 111 vs. Leafly Holdings |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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