Correlation Between Coupang LLC and 404280CF4

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Can any of the company-specific risk be diversified away by investing in both Coupang LLC and 404280CF4 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 404280CF4 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coupang LLC and HSBC HOLDINGS PLC, you can compare the effects of market volatilities on Coupang LLC and 404280CF4 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 404280CF4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coupang LLC and 404280CF4.

Diversification Opportunities for Coupang LLC and 404280CF4

-0.45
  Correlation Coefficient

Very good diversification

The 3 months correlation between Coupang and 404280CF4 is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Coupang LLC and HSBC HOLDINGS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC HOLDINGS PLC 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 404280CF4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC HOLDINGS PLC has no effect on the direction of Coupang LLC i.e., Coupang LLC and 404280CF4 go up and down completely randomly.

Pair Corralation between Coupang LLC and 404280CF4

Given the investment horizon of 90 days Coupang LLC is expected to generate 8.6 times more return on investment than 404280CF4. However, Coupang LLC is 8.6 times more volatile than HSBC HOLDINGS PLC. It trades about 0.01 of its potential returns per unit of risk. HSBC HOLDINGS PLC is currently generating about -0.09 per unit of risk. If you would invest  2,540  in Coupang LLC on September 2, 2024 and sell it today you would lose (4.00) from holding Coupang LLC or give up 0.16% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.24%
ValuesDaily Returns

Coupang LLC  vs.  HSBC HOLDINGS PLC

 Performance 
       Timeline  
Coupang LLC 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Coupang LLC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Coupang LLC reported solid returns over the last few months and may actually be approaching a breakup point.
HSBC HOLDINGS PLC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days HSBC HOLDINGS PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 404280CF4 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Coupang LLC and 404280CF4 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Coupang LLC and 404280CF4

The main advantage of trading using opposite Coupang LLC and 404280CF4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coupang LLC position performs unexpectedly, 404280CF4 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 404280CF4 will offset losses from the drop in 404280CF4's long position.
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The idea behind Coupang LLC and HSBC HOLDINGS PLC 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.
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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