Correlation Between Coupang and MEITUAN UNSPADR/2B
Can any of the company-specific risk be diversified away by investing in both Coupang and MEITUAN UNSPADR/2B 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 Coupang and MEITUAN UNSPADR/2B into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coupang and MEITUAN UNSPADR2B, you can compare the effects of market volatilities on Coupang and MEITUAN UNSPADR/2B 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 Coupang with a short position of MEITUAN UNSPADR/2B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coupang and MEITUAN UNSPADR/2B.
Diversification Opportunities for Coupang and MEITUAN UNSPADR/2B
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Coupang and MEITUAN is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Coupang and MEITUAN UNSPADR2B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEITUAN UNSPADR/2B and Coupang 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 Coupang are associated (or correlated) with MEITUAN UNSPADR/2B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEITUAN UNSPADR/2B has no effect on the direction of Coupang i.e., Coupang and MEITUAN UNSPADR/2B go up and down completely randomly.
Pair Corralation between Coupang and MEITUAN UNSPADR/2B
Assuming the 90 days horizon Coupang is expected to generate 1.6 times less return on investment than MEITUAN UNSPADR/2B. But when comparing it to its historical volatility, Coupang is 1.77 times less risky than MEITUAN UNSPADR/2B. It trades about 0.08 of its potential returns per unit of risk. MEITUAN UNSPADR2B is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,300 in MEITUAN UNSPADR2B on August 24, 2024 and sell it today you would earn a total of 1,840 from holding MEITUAN UNSPADR2B or generate 80.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coupang vs. MEITUAN UNSPADR2B
Performance |
| Timeline |
| Coupang |
| MEITUAN UNSPADR/2B |
Coupang and MEITUAN UNSPADR/2B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coupang and MEITUAN UNSPADR/2B
The main advantage of trading using opposite Coupang and MEITUAN UNSPADR/2B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coupang position performs unexpectedly, MEITUAN UNSPADR/2B 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 MEITUAN UNSPADR/2B will offset losses from the drop in MEITUAN UNSPADR/2B's long position.| Coupang vs. Salesforce | Coupang vs. Cars Inc | Coupang vs. GEELY AUTOMOBILE | Coupang vs. Playa Hotels Resorts |
| MEITUAN UNSPADR/2B vs. Siamgas And Petrochemicals | MEITUAN UNSPADR/2B vs. MCEWEN MINING INC | MEITUAN UNSPADR/2B vs. Perseus Mining Limited | MEITUAN UNSPADR/2B vs. QIIWI GAMES AB |
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 the Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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