Correlation Between Costco Wholesale and Nanalysis Scientific

Can any of the company-specific risk be diversified away by investing in both Costco Wholesale and Nanalysis Scientific 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 Costco Wholesale and Nanalysis Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Costco Wholesale Corp and Nanalysis Scientific Corp, you can compare the effects of market volatilities on Costco Wholesale and Nanalysis Scientific 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 Costco Wholesale with a short position of Nanalysis Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costco Wholesale and Nanalysis Scientific.

Diversification Opportunities for Costco Wholesale and Nanalysis Scientific

-0.82

Correlation Coefficient

Costco Wholesale  Nanalysis Scientific

Pay attention - limited upside

The 3 months correlation between Costco and Nanalysis is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale Corp and Nanalysis Scientific Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanalysis Scientific Corp and Costco Wholesale 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 Costco Wholesale Corp are associated (or correlated) with Nanalysis Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanalysis Scientific Corp has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and Nanalysis Scientific go up and down completely randomly.

Pair Corralation between Costco Wholesale and Nanalysis Scientific

Assuming the 90 days trading horizon Costco Wholesale Corp is expected to generate 0.28 times more return on investment than Nanalysis Scientific. However, Costco Wholesale Corp is 3.56 times less risky than Nanalysis Scientific. It trades about 0.09 of its potential returns per unit of risk. Nanalysis Scientific Corp is currently generating about -0.09 per unit of risk. If you would invest  4,190  in Costco Wholesale Corp on September 26, 2024 and sell it today you would earn a total of  248.00  from holding Costco Wholesale Corp or generate 5.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Costco Wholesale Corp  vs.  Nanalysis Scientific Corp

Costco Wholesale Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Costco Wholesale Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Costco Wholesale is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Nanalysis Scientific Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nanalysis Scientific Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Costco Wholesale and Nanalysis Scientific

The main advantage of trading using opposite Costco Wholesale and Nanalysis Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, Nanalysis Scientific 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 Nanalysis Scientific will offset losses from the drop in Nanalysis Scientific's long position.

The idea behind Costco Wholesale Corp and Nanalysis Scientific Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.