Correlation Between Rbr Top and Costco Wholesale

Can any of the company-specific risk be diversified away by investing in both Rbr Top 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 Rbr Top and Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Rbr Top Offices and Costco Wholesale, you can compare the effects of market volatilities on Rbr Top 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 Rbr Top with a short position of Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rbr Top and Costco Wholesale.

Diversification Opportunities for Rbr Top and Costco Wholesale

0.44

Correlation Coefficient

Rbr Top  Costco Wholesale

Very weak diversification

The 3 months correlation between Rbr and Costco is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Rbr Top Offices and Costco Wholesale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costco Wholesale and Rbr Top 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 Rbr Top Offices 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 has no effect on the direction of Rbr Top i.e., Rbr Top and Costco Wholesale go up and down completely randomly.

Pair Corralation between Rbr Top and Costco Wholesale

Assuming the 90 days trading horizon Rbr Top Offices is expected to generate 0.54 times more return on investment than Costco Wholesale. However, Rbr Top Offices is 1.84 times less risky than Costco Wholesale. It trades about 0.03 of its potential returns per unit of risk. Costco Wholesale is currently generating about -0.02 per unit of risk. If you would invest  6,975  in Rbr Top Offices on April 24, 2025 and sell it today you would earn a total of  126.00  from holding Rbr Top Offices or generate 1.81% return on investment over 90 days.

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

Rbr Top Offices  vs.  Costco Wholesale

Rbr Top Offices

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Rbr Top Offices are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Rbr Top is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Costco Wholesale

Risk-Adjusted Performance

Very Weak

Over the last 90 days Costco Wholesale has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Costco Wholesale is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Rbr Top and Costco Wholesale

The main advantage of trading using opposite Rbr Top and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rbr Top 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 Rbr Top Offices and Costco Wholesale 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.