Correlation Between Coupang LLC and Hafnia
Can any of the company-specific risk be diversified away by investing in both Coupang LLC and Hafnia 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 Hafnia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coupang LLC and Hafnia Limited, you can compare the effects of market volatilities on Coupang LLC and Hafnia 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 Hafnia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coupang LLC and Hafnia.
Diversification Opportunities for Coupang LLC and Hafnia
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coupang and Hafnia is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Coupang LLC and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited 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 Hafnia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hafnia Limited has no effect on the direction of Coupang LLC i.e., Coupang LLC and Hafnia go up and down completely randomly.
Pair Corralation between Coupang LLC and Hafnia
Given the investment horizon of 90 days Coupang LLC is expected to generate 1.21 times less return on investment than Hafnia. But when comparing it to its historical volatility, Coupang LLC is 1.17 times less risky than Hafnia. It trades about 0.04 of its potential returns per unit of risk. Hafnia Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 411.00 in Hafnia Limited on September 2, 2024 and sell it today you would earn a total of 158.00 from holding Hafnia Limited or generate 38.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 79.84% |
| Values | Daily Returns |
Coupang LLC vs. Hafnia Limited
Performance |
| Timeline |
| Coupang LLC |
| Hafnia Limited |
Coupang LLC and Hafnia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coupang LLC and Hafnia
The main advantage of trading using opposite Coupang LLC and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coupang LLC position performs unexpectedly, Hafnia 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 Hafnia will offset losses from the drop in Hafnia's 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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