Correlation Between COSTCO WHOLESALE and Accenture Plc

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

Diversification Opportunities for COSTCO WHOLESALE and Accenture Plc

0.84

Correlation Coefficient

COSTCO WHOLESALE  Accenture Plc

Very poor diversification

The 3 months correlation between COSTCO and Accenture is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding COSTCO WHOLESALE CDR and Accenture plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accenture plc 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 Accenture Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accenture plc has no effect on the direction of COSTCO WHOLESALE i.e., COSTCO WHOLESALE and Accenture Plc go up and down completely randomly.

Pair Corralation between COSTCO WHOLESALE and Accenture Plc

Assuming the 90 days trading horizon COSTCO WHOLESALE is expected to generate 6.0 times less return on investment than Accenture Plc. But when comparing it to its historical volatility, COSTCO WHOLESALE CDR is 1.14 times less risky than Accenture Plc. It trades about 0.0 of its potential returns per unit of risk. Accenture plc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  24,372  in Accenture plc on April 20, 2025 and sell it today you would lose (47.00) from holding Accenture plc or give up 0.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

COSTCO WHOLESALE CDR  vs.  Accenture plc

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.

Accenture plc

Risk-Adjusted Performance

Very Weak

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

Pair Trading with COSTCO WHOLESALE and Accenture Plc

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

The idea behind COSTCO WHOLESALE CDR and Accenture plc 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.