Correlation Between Coupang LLC and STRYKER

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Can any of the company-specific risk be diversified away by investing in both Coupang LLC and STRYKER 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 STRYKER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coupang LLC and STRYKER P 4375, you can compare the effects of market volatilities on Coupang LLC and STRYKER 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 STRYKER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coupang LLC and STRYKER.

Diversification Opportunities for Coupang LLC and STRYKER

0.44
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Coupang and STRYKER is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Coupang LLC and STRYKER P 4375 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRYKER P 4375 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 STRYKER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRYKER P 4375 has no effect on the direction of Coupang LLC i.e., Coupang LLC and STRYKER go up and down completely randomly.

Pair Corralation between Coupang LLC and STRYKER

Given the investment horizon of 90 days Coupang LLC is expected to generate 112.24 times less return on investment than STRYKER. But when comparing it to its historical volatility, Coupang LLC is 46.78 times less risky than STRYKER. It trades about 0.04 of its potential returns per unit of risk. STRYKER P 4375 is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  8,683  in STRYKER P 4375 on September 3, 2024 and sell it today you would earn a total of  323.00  from holding STRYKER P 4375 or generate 3.72% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy31.31%
ValuesDaily Returns

Coupang LLC  vs.  STRYKER P 4375

 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 inconsistent basic indicators, Coupang LLC reported solid returns over the last few months and may actually be approaching a breakup point.
STRYKER P 4375 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days STRYKER P 4375 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, STRYKER is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Coupang LLC and STRYKER Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Coupang LLC and STRYKER

The main advantage of trading using opposite Coupang LLC and STRYKER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coupang LLC position performs unexpectedly, STRYKER 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 STRYKER will offset losses from the drop in STRYKER's long position.
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The idea behind Coupang LLC and STRYKER P 4375 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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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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