Correlation Between Blue Apron and Costco Wholesale

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

Diversification Opportunities for Blue Apron and Costco Wholesale

  Correlation Coefficient

Modest diversification

The 3 months correlation between Blue Apron and Costco is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Blue Apron Holdings and Costco Wholesale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costco Wholesale and Blue Apron 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 Blue Apron Holdings 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 Blue Apron i.e., Blue Apron and Costco Wholesale go up and down completely randomly.

Pair Corralation between Blue Apron and Costco Wholesale

Given the investment horizon of 90 days Blue Apron Holdings is expected to generate 4.55 times more return on investment than Costco Wholesale. However, Blue Apron is 4.55 times more volatile than Costco Wholesale. It trades about 0.02 of its potential returns per unit of risk. Costco Wholesale is currently generating about 0.04 per unit of risk. If you would invest  753.00  in Blue Apron Holdings on June 28, 2022 and sell it today you would lose (306.00)  from holding Blue Apron Holdings or give up 40.64% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
ValuesDaily Returns

Blue Apron Holdings  vs.  Costco Wholesale

 Performance (%) 
Blue Apron Holdings 
Blue Apron Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Blue Apron Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal basic indicators, Blue Apron disclosed solid returns over the last few months and may actually be approaching a breakup point.

Blue Apron Price Channel

Costco Wholesale 
Costco Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Costco Wholesale are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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

Blue Apron and Costco Wholesale Volatility Contrast

   Predicted Return Density   

Pair Trading with Blue Apron and Costco Wholesale

The main advantage of trading using opposite Blue Apron and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Apron 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.
Blue Apron vs. Clearwater Paper Corp
The idea behind Blue Apron Holdings 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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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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