Correlation Between Unifique Telecomunicaes and Costco Wholesale

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

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

Diversification Opportunities for Unifique Telecomunicaes and Costco Wholesale

-0.12

Correlation Coefficient

Unifique Telecomunicaes  Costco Wholesale

Good diversification

The 3 months correlation between Unifique and Costco is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Unifique Telecomunicaes SA and Costco Wholesale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costco Wholesale and Unifique Telecomunicaes 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 Unifique Telecomunicaes SA 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 has no effect on the direction of Unifique Telecomunicaes i.e., Unifique Telecomunicaes and Costco Wholesale go up and down completely randomly.

Pair Corralation between Unifique Telecomunicaes and Costco Wholesale

Assuming the 90 days trading horizon Unifique Telecomunicaes SA is expected to generate 0.81 times more return on investment than Costco Wholesale. However, Unifique Telecomunicaes SA is 1.24 times less risky than Costco Wholesale. It trades about 0.1 of its potential returns per unit of risk. Costco Wholesale is currently generating about -0.08 per unit of risk. If you would invest  329.00  in Unifique Telecomunicaes SA on December 24, 2024 and sell it today you would earn a total of  31.00  from holding Unifique Telecomunicaes SA or generate 9.42% return on investment over 90 days.

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

Unifique Telecomunicaes SA  vs.  Costco Wholesale

Unifique Telecomunicaes

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Unifique Telecomunicaes SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Unifique Telecomunicaes may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Costco Wholesale

Risk-Adjusted Performance

Very Weak

Over the last 90 days Costco Wholesale has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Unifique Telecomunicaes and Costco Wholesale

The main advantage of trading using opposite Unifique Telecomunicaes and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unifique Telecomunicaes 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.

The idea behind Unifique Telecomunicaes SA and Costco Wholesale 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.