Correlation Between HNI Corp and Coupang LLC
Can any of the company-specific risk be diversified away by investing in both HNI Corp and Coupang LLC 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 HNI Corp and Coupang LLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HNI Corp and Coupang LLC, you can compare the effects of market volatilities on HNI Corp and Coupang LLC 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 HNI Corp with a short position of Coupang LLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNI Corp and Coupang LLC.
Diversification Opportunities for HNI Corp and Coupang LLC
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between HNI and Coupang is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding HNI Corp and Coupang LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coupang LLC and HNI Corp 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 HNI Corp are associated (or correlated) with Coupang LLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coupang LLC has no effect on the direction of HNI Corp i.e., HNI Corp and Coupang LLC go up and down completely randomly.
Pair Corralation between HNI Corp and Coupang LLC
Considering the 90-day investment horizon HNI Corp is expected to generate 0.51 times more return on investment than Coupang LLC. However, HNI Corp is 1.94 times less risky than Coupang LLC. It trades about 0.31 of its potential returns per unit of risk. Coupang LLC is currently generating about -0.02 per unit of risk. If you would invest 4,988 in HNI Corp on August 30, 2024 and sell it today you would earn a total of 639.00 from holding HNI Corp or generate 12.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HNI Corp vs. Coupang LLC
Performance |
| Timeline |
| HNI Corp |
| Coupang LLC |
HNI Corp and Coupang LLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HNI Corp and Coupang LLC
The main advantage of trading using opposite HNI Corp and Coupang LLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNI Corp position performs unexpectedly, Coupang LLC 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 Coupang LLC will offset losses from the drop in Coupang LLC's long position.The idea behind HNI Corp and Coupang LLC 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.| Coupang LLC vs. PDD Holdings | Coupang LLC vs. JD Inc Adr | Coupang LLC vs. Alibaba Group Holding | Coupang LLC vs. Global E Online |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |