Correlation Between Alico and Costco Wholesale

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Alico 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 Alico and Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alico Inc and Costco Wholesale, you can compare the effects of market volatilities on Alico 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 Alico with a short position of Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alico and Costco Wholesale.

Diversification Opportunities for Alico and Costco Wholesale

0.56
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Alico and Costco is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Alico Inc and Costco Wholesale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costco Wholesale and Alico 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 Alico Inc 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 Alico i.e., Alico and Costco Wholesale go up and down completely randomly.

Pair Corralation between Alico and Costco Wholesale

Given the investment horizon of 90 days Alico Inc is expected to under-perform the Costco Wholesale. In addition to that, Alico is 1.43 times more volatile than Costco Wholesale. It trades about -0.21 of its total potential returns per unit of risk. Costco Wholesale is currently generating about -0.21 per unit of volatility. If you would invest  52,964  in Costco Wholesale on July 9, 2022 and sell it today you would lose (4,715)  from holding Costco Wholesale or give up 8.9% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Alico Inc  vs.  Costco Wholesale

 Performance (%) 
       Timeline  
Alico Inc 
Alico Performance
0 of 100
Over the last 90 days Alico Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite sluggish performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in November 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Alico Price Channel

Costco Wholesale 
Costco Performance
0 of 100
Over the last 90 days Costco Wholesale has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Costco Wholesale is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Costco Price Channel

Alico and Costco Wholesale Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Alico and Costco Wholesale

The main advantage of trading using opposite Alico and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alico 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.
Alico vs. Vroom Inc
The idea behind Alico Inc 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.
Costco Wholesale vs. Amazon Inc
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

Other Complementary Tools

Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Go
CEO Directory
Screen CEOs from public companies around the world
Go
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go