Correlation Between Vipshop Holdings and Coupang LLC
Can any of the company-specific risk be diversified away by investing in both Vipshop 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 Vipshop 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 Vipshop Holdings Limited and Coupang LLC, you can compare the effects of market volatilities on Vipshop 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 Vipshop Holdings with a short position of Coupang LLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vipshop Holdings and Coupang LLC.
Diversification Opportunities for Vipshop Holdings and Coupang LLC
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vipshop and Coupang is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Vipshop Holdings Limited and Coupang LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coupang LLC and Vipshop 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 Vipshop Holdings Limited 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 Vipshop Holdings i.e., Vipshop Holdings and Coupang LLC go up and down completely randomly.
Pair Corralation between Vipshop Holdings and Coupang LLC
Given the investment horizon of 90 days Vipshop Holdings Limited is expected to under-perform the Coupang LLC. But the stock apears to be less risky and, when comparing its historical volatility, Vipshop Holdings Limited is 1.56 times less risky than Coupang LLC. The stock trades about -0.14 of its potential returns per unit of risk. The Coupang LLC is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,600 in Coupang LLC on August 30, 2024 and sell it today you would lose (53.00) from holding Coupang LLC or give up 2.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vipshop Holdings Limited vs. Coupang LLC
Performance |
| Timeline |
| Vipshop Holdings |
| Coupang LLC |
Vipshop Holdings and Coupang LLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vipshop Holdings and Coupang LLC
The main advantage of trading using opposite Vipshop Holdings and Coupang LLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vipshop 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.| Vipshop Holdings vs. JD Inc Adr | Vipshop Holdings vs. Alibaba Group Holding | Vipshop Holdings vs. Sea | Vipshop Holdings vs. Jumia Technologies AG |
| Coupang LLC vs. MercadoLibre | Coupang LLC vs. PDD Holdings | Coupang LLC vs. JD Inc Adr | Coupang LLC vs. Alibaba Group Holding |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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