Correlation Between Costco Wholesale and Apple

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

Diversification Opportunities for Costco Wholesale and Apple

0.9
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Costco and Apple is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and Apple go up and down completely randomly.

Pair Corralation between Costco Wholesale and Apple

Given the investment horizon of 90 days Costco Wholesale is expected to under-perform the Apple. In addition to that, Costco Wholesale is 1.02 times more volatile than Apple Inc. It trades about -0.05 of its total potential returns per unit of risk. Apple Inc is currently generating about -0.04 per unit of volatility. If you would invest  17,461  in Apple Inc on June 29, 2022 and sell it today you would lose (2,384)  from holding Apple Inc or give up 13.65% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Costco Wholesale  vs.  Apple Inc

 Performance (%) 
       Timeline  
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

Apple Inc 
Apple Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in October 2022.

Apple Price Channel

Costco Wholesale and Apple Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Costco Wholesale and Apple

The main advantage of trading using opposite Costco Wholesale and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.
Costco Wholesale vs. Kibush Capital Corp
The idea behind Costco Wholesale and Apple Inc 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.
Apple vs. Kibush Capital Corp
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 Focused Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

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