Correlation Between Lonking Holdings and Coupang LLC
Can any of the company-specific risk be diversified away by investing in both Lonking Holdings 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 Lonking Holdings and Coupang LLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lonking Holdings Ltd and Coupang LLC, you can compare the effects of market volatilities on Lonking Holdings 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 Lonking Holdings with a short position of Coupang LLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lonking Holdings and Coupang LLC.
Diversification Opportunities for Lonking Holdings and Coupang LLC
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lonking and Coupang is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Lonking Holdings Ltd and Coupang LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coupang LLC and Lonking Holdings 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 Lonking Holdings Ltd 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 Lonking Holdings i.e., Lonking Holdings and Coupang LLC go up and down completely randomly.
Pair Corralation between Lonking Holdings and Coupang LLC
Assuming the 90 days horizon Lonking Holdings is expected to generate 1.2 times less return on investment than Coupang LLC. In addition to that, Lonking Holdings is 1.19 times more volatile than Coupang LLC. It trades about 0.06 of its total potential returns per unit of risk. Coupang LLC is currently generating about 0.08 per unit of volatility. If you would invest 1,583 in Coupang LLC on September 4, 2024 and sell it today you would earn a total of 809.00 from holding Coupang LLC or generate 51.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 59.92% |
| Values | Daily Returns |
Lonking Holdings Ltd vs. Coupang LLC
Performance |
| Timeline |
| Lonking Holdings |
| Coupang LLC |
Lonking Holdings and Coupang LLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lonking Holdings and Coupang LLC
The main advantage of trading using opposite Lonking Holdings and Coupang LLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lonking Holdings 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.| Lonking Holdings vs. Cementos Pacasmayo SAA | Lonking Holdings vs. Chemours Co | Lonking Holdings vs. Griffon | Lonking Holdings vs. Jeld Wen Holding |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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