Correlation Between ALBIS LEASING and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both ALBIS LEASING 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 ALBIS LEASING and Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALBIS LEASING AG and Costco Wholesale Corp, you can compare the effects of market volatilities on ALBIS LEASING 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 ALBIS LEASING with a short position of Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALBIS LEASING and Costco Wholesale.
Diversification Opportunities for ALBIS LEASING and Costco Wholesale
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between ALBIS and Costco is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding ALBIS LEASING AG 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 ALBIS LEASING 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 ALBIS LEASING AG 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 ALBIS LEASING i.e., ALBIS LEASING and Costco Wholesale go up and down completely randomly.
Pair Corralation between ALBIS LEASING and Costco Wholesale
Assuming the 90 days trading horizon ALBIS LEASING AG is expected to under-perform the Costco Wholesale. But the stock apears to be less risky and, when comparing its historical volatility, ALBIS LEASING AG is 1.75 times less risky than Costco Wholesale. The stock trades about -0.07 of its potential returns per unit of risk. The Costco Wholesale Corp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 81,320 in Costco Wholesale Corp on October 6, 2024 and sell it today you would earn a total of 8,050 from holding Costco Wholesale Corp or generate 9.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
ALBIS LEASING AG vs. Costco Wholesale Corp
Performance |
Timeline |
ALBIS LEASING AG |
Costco Wholesale Corp |
ALBIS LEASING and Costco Wholesale Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ALBIS LEASING and Costco Wholesale
The main advantage of trading using opposite ALBIS LEASING and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALBIS LEASING 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.ALBIS LEASING vs. Cairo Communication SpA | ALBIS LEASING vs. Spirent Communications plc | ALBIS LEASING vs. Yanzhou Coal Mining | ALBIS LEASING vs. Eurasia Mining Plc |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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