Correlation Between Costco Wholesale and CSSC Offshore

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

Diversification Opportunities for Costco Wholesale and CSSC Offshore

-0.6

Correlation Coefficient

Costco Wholesale  CSSC Offshore

Excellent diversification

The 3 months correlation between Costco and CSSC is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale Corp and CSSC Offshore Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSSC Offshore Marine 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 CSSC Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSSC Offshore Marine has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and CSSC Offshore go up and down completely randomly.

Pair Corralation between Costco Wholesale and CSSC Offshore

Assuming the 90 days trading horizon Costco Wholesale Corp is expected to under-perform the CSSC Offshore. In addition to that, Costco Wholesale is 10.11 times more volatile than CSSC Offshore Marine. It trades about -0.08 of its total potential returns per unit of risk. CSSC Offshore Marine is currently generating about 0.12 per unit of volatility. If you would invest  121.00  in CSSC Offshore Marine on April 24, 2025 and sell it today you would earn a total of  1.00  from holding CSSC Offshore Marine or generate 0.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Costco Wholesale Corp  vs.  CSSC Offshore Marine

Costco Wholesale Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Costco Wholesale Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Costco Wholesale is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

CSSC Offshore Marine

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CSSC Offshore Marine are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, CSSC Offshore is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Costco Wholesale and CSSC Offshore

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

The idea behind Costco Wholesale Corp and CSSC Offshore Marine 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 Stocks Directory module to find actively traded stocks across global markets.