Correlation Between Coupang LLC and Bluerock Homes

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

Diversification Opportunities for Coupang LLC and Bluerock Homes

0.26
  Correlation Coefficient

Modest diversification

The 3 months correlation between Coupang and Bluerock is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Coupang LLC and Bluerock Homes Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluerock Homes Trust 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 Bluerock Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluerock Homes Trust has no effect on the direction of Coupang LLC i.e., Coupang LLC and Bluerock Homes go up and down completely randomly.

Pair Corralation between Coupang LLC and Bluerock Homes

Given the investment horizon of 90 days Coupang LLC is expected to generate 0.96 times more return on investment than Bluerock Homes. However, Coupang LLC is 1.04 times less risky than Bluerock Homes. It trades about 0.04 of its potential returns per unit of risk. Bluerock Homes Trust is currently generating about 0.03 per unit of risk. If you would invest  1,868  in Coupang LLC on September 12, 2024 and sell it today you would earn a total of  504.00  from holding Coupang LLC or generate 26.98% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Coupang LLC  vs.  Bluerock Homes Trust

 Performance 
       Timeline  
Coupang LLC 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Coupang LLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Coupang LLC is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.
Bluerock Homes Trust 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Bluerock Homes Trust are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical indicators, Bluerock Homes is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Coupang LLC and Bluerock Homes Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Coupang LLC and Bluerock Homes

The main advantage of trading using opposite Coupang LLC and Bluerock Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coupang LLC position performs unexpectedly, Bluerock Homes 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 Bluerock Homes will offset losses from the drop in Bluerock Homes' long position.
The idea behind Coupang LLC and Bluerock Homes Trust 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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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 Transaction History module to view history of all your transactions and understand their impact on performance.

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