Correlation Between Coupang LLC and JJill
Can any of the company-specific risk be diversified away by investing in both Coupang LLC and JJill 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 JJill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coupang LLC and JJill Inc, you can compare the effects of market volatilities on Coupang LLC and JJill 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 JJill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coupang LLC and JJill.
Diversification Opportunities for Coupang LLC and JJill
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coupang and JJill is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Coupang LLC and JJill Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJill Inc 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 JJill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JJill Inc has no effect on the direction of Coupang LLC i.e., Coupang LLC and JJill go up and down completely randomly.
Pair Corralation between Coupang LLC and JJill
Given the investment horizon of 90 days Coupang LLC is expected to under-perform the JJill. But the stock apears to be less risky and, when comparing its historical volatility, Coupang LLC is 1.2 times less risky than JJill. The stock trades about -0.03 of its potential returns per unit of risk. The JJill Inc is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,594 in JJill Inc on September 12, 2024 and sell it today you would earn a total of 172.00 from holding JJill Inc or generate 6.63% 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. JJill Inc
Performance |
| Timeline |
| Coupang LLC |
| JJill Inc |
Coupang LLC and JJill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coupang LLC and JJill
The main advantage of trading using opposite Coupang LLC and JJill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coupang LLC position performs unexpectedly, JJill 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 JJill will offset losses from the drop in JJill'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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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