Correlation Between Coupang LLC and HNI Corp
Can any of the company-specific risk be diversified away by investing in both Coupang LLC and HNI Corp 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 HNI Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coupang LLC and HNI Corp, you can compare the effects of market volatilities on Coupang LLC and HNI Corp 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 HNI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coupang LLC and HNI Corp.
Diversification Opportunities for Coupang LLC and HNI Corp
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Coupang and HNI is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Coupang LLC and HNI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI Corp 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 HNI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNI Corp has no effect on the direction of Coupang LLC i.e., Coupang LLC and HNI Corp go up and down completely randomly.
Pair Corralation between Coupang LLC and HNI Corp
Given the investment horizon of 90 days Coupang LLC is expected to generate 1.86 times less return on investment than HNI Corp. In addition to that, Coupang LLC is 1.3 times more volatile than HNI Corp. It trades about 0.04 of its total potential returns per unit of risk. HNI Corp is currently generating about 0.09 per unit of volatility. If you would invest 2,662 in HNI Corp on August 27, 2024 and sell it today you would earn a total of 2,955 from holding HNI Corp or generate 111.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coupang LLC vs. HNI Corp
Performance |
| Timeline |
| Coupang LLC |
| HNI Corp |
Coupang LLC and HNI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coupang LLC and HNI Corp
The main advantage of trading using opposite Coupang LLC and HNI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coupang LLC position performs unexpectedly, HNI Corp 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 HNI Corp will offset losses from the drop in HNI Corp's long position.| Coupang LLC vs. MercadoLibre | Coupang LLC vs. PDD Holdings | Coupang LLC vs. JD Inc Adr | Coupang LLC vs. Alibaba Group Holding |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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