Correlation Between Generation Mining and Costco Wholesale

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Can any of the company-specific risk be diversified away by investing in both Generation Mining 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 Generation Mining and Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Generation Mining and Costco Wholesale Corp, you can compare the effects of market volatilities on Generation Mining 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 Generation Mining with a short position of Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generation Mining and Costco Wholesale.

Diversification Opportunities for Generation Mining and Costco Wholesale

0.15
  Correlation Coefficient

Average diversification

The 3 months correlation between Generation and Costco is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Generation Mining and Costco Wholesale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costco Wholesale Corp and Generation Mining 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 Generation Mining 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 Corp has no effect on the direction of Generation Mining i.e., Generation Mining and Costco Wholesale go up and down completely randomly.

Pair Corralation between Generation Mining and Costco Wholesale

Assuming the 90 days trading horizon Generation Mining is expected to under-perform the Costco Wholesale. In addition to that, Generation Mining is 10.71 times more volatile than Costco Wholesale Corp. It trades about -0.03 of its total potential returns per unit of risk. Costco Wholesale Corp is currently generating about 0.41 per unit of volatility. If you would invest  3,337  in Costco Wholesale Corp on December 5, 2023 and sell it today you would earn a total of  176.00  from holding Costco Wholesale Corp or generate 5.27% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

Generation Mining  vs.  Costco Wholesale Corp

 Performance 
       Timeline  
Generation Mining 

Risk-Adjusted Performance

3 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Generation Mining are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Generation Mining displayed solid returns over the last few months and may actually be approaching a breakup point.
Costco Wholesale Corp 

Risk-Adjusted Performance

26 of 100

 
Low
 
High
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Costco Wholesale Corp are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Costco Wholesale exhibited solid returns over the last few months and may actually be approaching a breakup point.

Generation Mining and Costco Wholesale Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Generation Mining and Costco Wholesale

The main advantage of trading using opposite Generation Mining and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Generation Mining 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 Generation Mining and Costco Wholesale Corp 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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