Correlation Between 06051GKM0 and Coupang LLC

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Can any of the company-specific risk be diversified away by investing in both 06051GKM0 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 06051GKM0 and Coupang LLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BAC 3384 02 APR 26 and Coupang LLC, you can compare the effects of market volatilities on 06051GKM0 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 06051GKM0 with a short position of Coupang LLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of 06051GKM0 and Coupang LLC.

Diversification Opportunities for 06051GKM0 and Coupang LLC

0.41
  Correlation Coefficient

Very weak diversification

The 3 months correlation between 06051GKM0 and Coupang is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding BAC 3384 02 APR 26 and Coupang LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coupang LLC and 06051GKM0 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 BAC 3384 02 APR 26 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 06051GKM0 i.e., 06051GKM0 and Coupang LLC go up and down completely randomly.

Pair Corralation between 06051GKM0 and Coupang LLC

Assuming the 90 days trading horizon BAC 3384 02 APR 26 is expected to generate 0.11 times more return on investment than Coupang LLC. However, BAC 3384 02 APR 26 is 9.35 times less risky than Coupang LLC. It trades about -0.19 of its potential returns per unit of risk. Coupang LLC is currently generating about -0.02 per unit of risk. If you would invest  9,929  in BAC 3384 02 APR 26 on August 28, 2024 and sell it today you would lose (144.00) from holding BAC 3384 02 APR 26 or give up 1.45% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.45%
ValuesDaily Returns

BAC 3384 02 APR 26  vs.  Coupang LLC

 Performance 
       Timeline  
BAC 3384 02 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BAC 3384 02 APR 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 06051GKM0 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Coupang LLC 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Coupang LLC are ranked lower than 7 (%) 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.

06051GKM0 and Coupang LLC Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with 06051GKM0 and Coupang LLC

The main advantage of trading using opposite 06051GKM0 and Coupang LLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 06051GKM0 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.
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The idea behind BAC 3384 02 APR 26 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.
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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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