Correlation Between Costco Wholesale and SITO Mobile

Can any of the company-specific risk be diversified away by investing in both Costco Wholesale and SITO Mobile 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 SITO Mobile 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 SITO Mobile, you can compare the effects of market volatilities on Costco Wholesale and SITO Mobile 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 SITO Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costco Wholesale and SITO Mobile.

Diversification Opportunities for Costco Wholesale and SITO Mobile

0.07

Correlation Coefficient

Costco Wholesale  SITO Mobile

Significant diversification

The 3 months correlation between Costco and SITO is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale Corp and SITO Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SITO Mobile 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 SITO Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SITO Mobile has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and SITO Mobile go up and down completely randomly.

Pair Corralation between Costco Wholesale and SITO Mobile

If you would invest  0.21  in SITO Mobile on January 25, 2024 and sell it today you would earn a total of  0.00  from holding SITO Mobile or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Costco Wholesale Corp  vs.  SITO Mobile

Costco Wholesale Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Costco Wholesale Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Costco Wholesale may actually be approaching a critical reversion point that can send shares even higher in May 2024.

SITO Mobile

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SITO Mobile has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, SITO Mobile is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Costco Wholesale and SITO Mobile

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

The idea behind Costco Wholesale Corp and SITO Mobile 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..