Correlation Between Costco Wholesale and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Costco Wholesale and Goldman Sachs 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 Goldman Sachs 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 Goldman Sachs Dynamic, you can compare the effects of market volatilities on Costco Wholesale and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costco Wholesale and Goldman Sachs.
Diversification Opportunities for Costco Wholesale and Goldman Sachs
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Costco and Goldman is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale Corp and Goldman Sachs Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Dynamic 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Dynamic has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and Goldman Sachs go up and down completely randomly.
Pair Corralation between Costco Wholesale and Goldman Sachs
Given the investment horizon of 90 days Costco Wholesale Corp is expected to generate 1.09 times more return on investment than Goldman Sachs. However, Costco Wholesale is 1.09 times more volatile than Goldman Sachs Dynamic. It trades about -0.12 of its potential returns per unit of risk. Goldman Sachs Dynamic is currently generating about -0.2 per unit of risk. If you would invest 73,217 in Costco Wholesale Corp on January 19, 2024 and sell it today you would lose (1,698) from holding Costco Wholesale Corp or give up 2.32% 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. Goldman Sachs Dynamic
Performance |
| Timeline |
| Costco Wholesale Corp |
| Goldman Sachs Dynamic |
Costco Wholesale and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costco Wholesale and Goldman Sachs
The main advantage of trading using opposite Costco Wholesale and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Costco Wholesale vs. Betterware De Mexico | Costco Wholesale vs. Amexdrug | Costco Wholesale vs. Provident Bancorp | Costco Wholesale vs. Mersana Therapeutics |
| Goldman Sachs vs. Dreyfusstandish Global Fixed | Goldman Sachs vs. T Rowe Price | Goldman Sachs vs. Versatile Bond Portfolio | Goldman Sachs vs. T Rowe Price |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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