Correlation Between Coupang LLC and PACIFIC

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

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

Diversification Opportunities for Coupang LLC and PACIFIC

0.02

Correlation Coefficient

Coupang LLC  PACIFIC

Significant diversification

The 3 months correlation between Coupang and PACIFIC is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Coupang LLC and PACIFIC GAS AND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACIFIC GAS AND 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 PACIFIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACIFIC GAS AND has no effect on the direction of Coupang LLC i.e., Coupang LLC and PACIFIC go up and down completely randomly.

Pair Corralation between Coupang LLC and PACIFIC

Given the investment horizon of 90 days Coupang LLC is expected to under-perform the PACIFIC. But the stock apears to be less risky and, when comparing its historical volatility, Coupang LLC is 2.14 times less risky than PACIFIC. The stock trades about -0.07 of its potential returns per unit of risk. The PACIFIC GAS AND is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  8,705  in PACIFIC GAS AND on October 7, 2024 and sell it today you would earn a total of  2,198  from holding PACIFIC GAS AND or generate 25.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.56%
Values	Daily Returns

Coupang LLC  vs.  PACIFIC GAS AND

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 unsteady 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.

PACIFIC GAS AND

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PACIFIC GAS AND are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, PACIFIC sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coupang LLC and PACIFIC

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

The idea behind Coupang LLC and PACIFIC GAS AND 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.