Correlation Between COSTCO WHOLESALE and FORTRESS BIOTECHPRFA

Can any of the company-specific risk be diversified away by investing in both COSTCO WHOLESALE and FORTRESS BIOTECHPRFA 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 FORTRESS BIOTECHPRFA 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 FORTRESS BIOTECHPRFA 25, you can compare the effects of market volatilities on COSTCO WHOLESALE and FORTRESS BIOTECHPRFA 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 FORTRESS BIOTECHPRFA. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSTCO WHOLESALE and FORTRESS BIOTECHPRFA.

Diversification Opportunities for COSTCO WHOLESALE and FORTRESS BIOTECHPRFA

-0.14

Correlation Coefficient

COSTCO WHOLESALE  FORTRESS BIOTECHPRFA

Good diversification

The 3 months correlation between COSTCO and FORTRESS is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding COSTCO WHOLESALE CDR and FORTRESS BIOTECHPRFA 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORTRESS BIOTECHPRFA 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 FORTRESS BIOTECHPRFA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORTRESS BIOTECHPRFA has no effect on the direction of COSTCO WHOLESALE i.e., COSTCO WHOLESALE and FORTRESS BIOTECHPRFA go up and down completely randomly.

Pair Corralation between COSTCO WHOLESALE and FORTRESS BIOTECHPRFA

Assuming the 90 days trading horizon COSTCO WHOLESALE CDR is expected to under-perform the FORTRESS BIOTECHPRFA. But the stock apears to be less risky and, when comparing its historical volatility, COSTCO WHOLESALE CDR is 3.44 times less risky than FORTRESS BIOTECHPRFA. The stock trades about -0.04 of its potential returns per unit of risk. The FORTRESS BIOTECHPRFA 25 is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  560.00  in FORTRESS BIOTECHPRFA 25 on April 24, 2025 and sell it today you would earn a total of  65.00  from holding FORTRESS BIOTECHPRFA 25 or generate 11.61% return on investment over 90 days.

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

COSTCO WHOLESALE CDR  vs.  FORTRESS BIOTECHPRFA 25

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.

FORTRESS BIOTECHPRFA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FORTRESS BIOTECHPRFA 25 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, FORTRESS BIOTECHPRFA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with COSTCO WHOLESALE and FORTRESS BIOTECHPRFA

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

The idea behind COSTCO WHOLESALE CDR and FORTRESS BIOTECHPRFA 25 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.