Correlation Between Coupang LLC and Beyond Meat
Can any of the company-specific risk be diversified away by investing in both Coupang LLC and Beyond Meat 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 Beyond Meat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coupang LLC and Beyond Meat, you can compare the effects of market volatilities on Coupang LLC and Beyond Meat 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 Beyond Meat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coupang LLC and Beyond Meat.
Diversification Opportunities for Coupang LLC and Beyond Meat
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Coupang and Beyond is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Coupang LLC and Beyond Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Meat 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 Beyond Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Meat has no effect on the direction of Coupang LLC i.e., Coupang LLC and Beyond Meat go up and down completely randomly.
Pair Corralation between Coupang LLC and Beyond Meat
Given the investment horizon of 90 days Coupang LLC is expected to generate 0.77 times more return on investment than Beyond Meat. However, Coupang LLC is 1.29 times less risky than Beyond Meat. It trades about -0.03 of its potential returns per unit of risk. Beyond Meat is currently generating about -0.21 per unit of risk. If you would invest 2,595 in Coupang LLC on August 28, 2024 and sell it today you would lose (95.00) from holding Coupang LLC or give up 3.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coupang LLC vs. Beyond Meat
Performance |
| Timeline |
| Coupang LLC |
| Beyond Meat |
Coupang LLC and Beyond Meat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coupang LLC and Beyond Meat
The main advantage of trading using opposite Coupang LLC and Beyond Meat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coupang LLC position performs unexpectedly, Beyond Meat 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 Beyond Meat will offset losses from the drop in Beyond Meat's long position.The idea behind Coupang LLC and Beyond Meat 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.| Beyond Meat vs. Kraft Heinz Co | Beyond Meat vs. Hormel Foods | Beyond Meat vs. Kellanova | Beyond Meat vs. General Mills |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |