Correlation Between COSTCO WHOLESALE and DATAWALK B

Can any of the company-specific risk be diversified away by investing in both COSTCO WHOLESALE and DATAWALK B 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 DATAWALK B into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between COSTCO WHOLESALE CDR and DATAWALK B H ZY, you can compare the effects of market volatilities on COSTCO WHOLESALE and DATAWALK B 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 DATAWALK B. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSTCO WHOLESALE and DATAWALK B.

Diversification Opportunities for COSTCO WHOLESALE and DATAWALK B

-0.41

Correlation Coefficient

COSTCO WHOLESALE  DATAWALK B

Very good diversification

The 3 months correlation between COSTCO and DATAWALK is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding COSTCO WHOLESALE CDR and DATAWALK B H ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATAWALK B H 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 CDR are associated (or correlated) with DATAWALK B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATAWALK B H has no effect on the direction of COSTCO WHOLESALE i.e., COSTCO WHOLESALE and DATAWALK B go up and down completely randomly.

Pair Corralation between COSTCO WHOLESALE and DATAWALK B

Assuming the 90 days trading horizon COSTCO WHOLESALE CDR is expected to under-perform the DATAWALK B. But the stock apears to be less risky and, when comparing its historical volatility, COSTCO WHOLESALE CDR is 3.13 times less risky than DATAWALK B. The stock trades about -0.04 of its potential returns per unit of risk. The DATAWALK B H ZY is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,906  in DATAWALK B H ZY on April 24, 2025 and sell it today you would earn a total of  654.00  from holding DATAWALK B H ZY or generate 34.31% return on investment over 90 days.

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

COSTCO WHOLESALE CDR  vs.  DATAWALK B H ZY

COSTCO WHOLESALE CDR

Risk-Adjusted Performance

Very Weak

Over the last 90 days COSTCO WHOLESALE CDR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, COSTCO WHOLESALE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

DATAWALK B H

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DATAWALK B H ZY are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, DATAWALK B reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with COSTCO WHOLESALE and DATAWALK B

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

The idea behind COSTCO WHOLESALE CDR and DATAWALK B H ZY 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.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.