Correlation Between Coupang LLC and Lion One
Can any of the company-specific risk be diversified away by investing in both Coupang LLC and Lion One 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 Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coupang LLC and Lion One Metals, you can compare the effects of market volatilities on Coupang LLC and Lion One 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 Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coupang LLC and Lion One.
Diversification Opportunities for Coupang LLC and Lion One
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Coupang and Lion is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Coupang LLC and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals 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 Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of Coupang LLC i.e., Coupang LLC and Lion One go up and down completely randomly.
Pair Corralation between Coupang LLC and Lion One
Given the investment horizon of 90 days Coupang LLC is expected to generate 1.23 times more return on investment than Lion One. However, Coupang LLC is 1.23 times more volatile than Lion One Metals. It trades about -0.07 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.35 per unit of risk. If you would invest 2,595 in Coupang LLC on August 27, 2024 and sell it today you would lose (163.00) from holding Coupang LLC or give up 6.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coupang LLC vs. Lion One Metals
Performance |
| Timeline |
| Coupang LLC |
| Lion One Metals |
Coupang LLC and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coupang LLC and Lion One
The main advantage of trading using opposite Coupang LLC and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coupang LLC position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One's long position.| Coupang LLC vs. MercadoLibre | Coupang LLC vs. PDD Holdings | Coupang LLC vs. JD Inc Adr | Coupang LLC vs. Alibaba Group Holding |
| Lion One vs. Ascendant Resources | Lion One vs. Cantex Mine Development | Lion One vs. Amarc Resources | Lion One vs. Sterling Metals Corp |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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