Correlation Between Costco Wholesale and Boqii Holding

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

Diversification Opportunities for Costco Wholesale and Boqii Holding

0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Costco and Boqii is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Costco Wholesale and Boqii Holding Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boqii Holding 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 Boqii Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boqii Holding has no effect on the direction of Costco Wholesale i.e., Costco Wholesale and Boqii Holding go up and down completely randomly.

Pair Corralation between Costco Wholesale and Boqii Holding

Given the investment horizon of 90 days Costco Wholesale is expected to generate 0.21 times more return on investment than Boqii Holding. However, Costco Wholesale is 4.74 times less risky than Boqii Holding. It trades about -0.2 of its potential returns per unit of risk. Boqii Holding is currently generating about -0.16 per unit of risk. If you would invest  54,701  in Costco Wholesale on July 4, 2022 and sell it today you would lose (7,474)  from holding Costco Wholesale or give up 13.66% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Costco Wholesale  vs.  Boqii Holding Ltd

 Performance (%) 
       Timeline  
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

Boqii Holding 
Boqii Performance
0 of 100
Over the last 90 days Boqii Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in November 2022. The recent disarray may also be a sign of long period up-swing for the firm insiders.

Boqii Price Channel

Costco Wholesale and Boqii Holding Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Costco Wholesale and Boqii Holding

The main advantage of trading using opposite Costco Wholesale and Boqii Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costco Wholesale position performs unexpectedly, Boqii Holding 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 Boqii Holding will offset losses from the drop in Boqii Holding's long position.
Costco Wholesale vs. Amazon Inc
The idea behind Costco Wholesale and Boqii Holding 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.
Boqii Holding vs. Best Buy Company
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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