Correlation Between Coupang LLC and AKA Brands
Can any of the company-specific risk be diversified away by investing in both Coupang LLC and AKA Brands 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 LLC and AKA Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coupang LLC and AKA Brands Holding, you can compare the effects of market volatilities on Coupang LLC and AKA Brands 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 LLC with a short position of AKA Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coupang LLC and AKA Brands.
Diversification Opportunities for Coupang LLC and AKA Brands
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Coupang and AKA is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Coupang LLC and AKA Brands Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKA Brands Holding and Coupang LLC 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 LLC are associated (or correlated) with AKA Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKA Brands Holding has no effect on the direction of Coupang LLC i.e., Coupang LLC and AKA Brands go up and down completely randomly.
Pair Corralation between Coupang LLC and AKA Brands
Given the investment horizon of 90 days Coupang LLC is expected to generate 3.59 times less return on investment than AKA Brands. But when comparing it to its historical volatility, Coupang LLC is 2.96 times less risky than AKA Brands. It trades about 0.05 of its potential returns per unit of risk. AKA Brands Holding is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,714 in AKA Brands Holding on September 1, 2024 and sell it today you would earn a total of 510.00 from holding AKA Brands Holding or generate 29.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coupang LLC vs. AKA Brands Holding
Performance |
| Timeline |
| Coupang LLC |
| AKA Brands Holding |
Coupang LLC and AKA Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coupang LLC and AKA Brands
The main advantage of trading using opposite Coupang LLC and AKA Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coupang LLC position performs unexpectedly, AKA Brands 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 AKA Brands will offset losses from the drop in AKA Brands' long position.| Coupang LLC vs. PDD Holdings | Coupang LLC vs. JD Inc Adr | Coupang LLC vs. Alibaba Group Holding | Coupang LLC vs. Sea |
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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 the Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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