Correlation Between Forza Petroleum and Coupang LLC

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

By analyzing existing cross correlation between Forza Petroleum Limited and Coupang LLC, you can compare the effects of market volatilities on Forza Petroleum 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 Forza Petroleum with a short position of Coupang LLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forza Petroleum and Coupang LLC.

Diversification Opportunities for Forza Petroleum and Coupang LLC

0.0

Correlation Coefficient

Forza Petroleum  Coupang LLC

Pay attention - limited upside

The 3 months correlation between Forza and Coupang is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Forza Petroleum Limited and Coupang LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coupang LLC and Forza Petroleum 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 Forza Petroleum 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 Forza Petroleum i.e., Forza Petroleum and Coupang LLC go up and down completely randomly.

Pair Corralation between Forza Petroleum and Coupang LLC

If you would invest  14.00  in Forza Petroleum Limited on October 25, 2024 and sell it today you would earn a total of  0.00  from holding Forza Petroleum Limited or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Forza Petroleum Limited  vs.  Coupang LLC

Forza Petroleum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forza Petroleum Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Forza Petroleum is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

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 inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Forza Petroleum and Coupang LLC

The main advantage of trading using opposite Forza Petroleum and Coupang LLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forza Petroleum 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.

The idea behind Forza Petroleum Limited 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.