Correlation Between Costco Wholesale and Ollies Bargain
Can any of the company-specific risk be diversified away by investing in both Costco Wholesale and Ollies Bargain 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 Ollies Bargain 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 Ollies Bargain Outlet, you can compare the effects of market volatilities on Costco Wholesale and Ollies Bargain 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 Ollies Bargain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costco Wholesale and Ollies Bargain.
Diversification Opportunities for Costco Wholesale and Ollies Bargain
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Costco and Ollies is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale Corp and Ollies Bargain Outlet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ollies Bargain Outlet 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 Ollies Bargain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ollies Bargain Outlet has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and Ollies Bargain go up and down completely randomly.
Pair Corralation between Costco Wholesale and Ollies Bargain
Given the investment horizon of 90 days Costco Wholesale Corp is expected to generate 0.32 times more return on investment than Ollies Bargain. However, Costco Wholesale Corp is 3.16 times less risky than Ollies Bargain. It trades about -0.06 of its potential returns per unit of risk. Ollies Bargain Outlet is currently generating about -0.08 per unit of risk. If you would invest 73,096 in Costco Wholesale Corp on January 25, 2024 and sell it today you would lose (828.00) from holding Costco Wholesale Corp or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Costco Wholesale Corp vs. Ollies Bargain Outlet
Performance |
| Timeline |
| Costco Wholesale Corp |
| Ollies Bargain Outlet |
Costco Wholesale and Ollies Bargain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costco Wholesale and Ollies Bargain
The main advantage of trading using opposite Costco Wholesale and Ollies Bargain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, Ollies Bargain 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 Ollies Bargain will offset losses from the drop in Ollies Bargain's long position.| Costco Wholesale vs. Big Lots | Costco Wholesale vs. Aquagold International | Costco Wholesale vs. Thrivent High Yield | Costco Wholesale vs. Morningstar Unconstrained Allocation |
| Ollies Bargain vs. BJs Wholesale Club | Ollies Bargain vs. Dollar General | Ollies Bargain vs. Costco Wholesale Corp | Ollies Bargain vs. Walmart |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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