Correlation Between Costco Wholesale and Freds
Can any of the company-specific risk be diversified away by investing in both Costco Wholesale and Freds 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 Freds 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 Freds Inc, you can compare the effects of market volatilities on Costco Wholesale and Freds 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 Freds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costco Wholesale and Freds.
Diversification Opportunities for Costco Wholesale and Freds
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Costco and Freds is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale Corp and Freds Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freds Inc 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 Freds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freds Inc has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and Freds go up and down completely randomly.
Pair Corralation between Costco Wholesale and Freds
If you would invest 71,067 in Costco Wholesale Corp on February 6, 2024 and sell it today you would earn a total of 4,578 from holding Costco Wholesale Corp or generate 6.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Costco Wholesale Corp vs. Freds Inc
Performance |
| Timeline |
| Costco Wholesale Corp |
| Freds Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Costco Wholesale and Freds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costco Wholesale and Freds
The main advantage of trading using opposite Costco Wholesale and Freds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, Freds 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 Freds will offset losses from the drop in Freds' long position.The idea behind Costco Wholesale Corp and Freds Inc 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.| Freds vs. Dyadic International | Freds vs. Anheuser Busch Inbev | Freds vs. Fevertree Drinks Plc | Freds vs. Marchex |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |