Correlation Between Coupang LLC and AGNC Investment

Can any of the company-specific risk be diversified away by investing in both Coupang LLC and AGNC Investment 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 AGNC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Coupang LLC and AGNC Investment Corp, you can compare the effects of market volatilities on Coupang LLC and AGNC Investment 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 AGNC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coupang LLC and AGNC Investment.

Diversification Opportunities for Coupang LLC and AGNC Investment

0.3

Correlation Coefficient

Coupang LLC  AGNC Investment

Weak diversification

The 3 months correlation between Coupang and AGNC is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Coupang LLC and AGNC Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGNC Investment Corp 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 AGNC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGNC Investment Corp has no effect on the direction of Coupang LLC i.e., Coupang LLC and AGNC Investment go up and down completely randomly.

Pair Corralation between Coupang LLC and AGNC Investment

Given the investment horizon of 90 days Coupang LLC is expected to generate 1.53 times more return on investment than AGNC Investment. However, Coupang LLC is 1.53 times more volatile than AGNC Investment Corp. It trades about 0.03 of its potential returns per unit of risk. AGNC Investment Corp is currently generating about 0.02 per unit of risk. If you would invest  1,689  in Coupang LLC on October 22, 2024 and sell it today you would earn a total of  517.00  from holding Coupang LLC or generate 30.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Coupang LLC  vs.  AGNC Investment Corp

Coupang LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coupang LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

AGNC Investment Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AGNC Investment Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, AGNC Investment is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Coupang LLC and AGNC Investment

The main advantage of trading using opposite Coupang LLC and AGNC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coupang LLC position performs unexpectedly, AGNC Investment 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 AGNC Investment will offset losses from the drop in AGNC Investment's long position.

The idea behind Coupang LLC and AGNC Investment Corp 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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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 Stocks Directory module to find actively traded stocks across global markets.