Correlation Between Pool and Coupang LLC

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

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

Diversification Opportunities for Pool and Coupang LLC

0.34

Correlation Coefficient

Pool  Coupang LLC

Weak diversification

The 3 months correlation between Pool and Coupang is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Pool Corp. and Coupang LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coupang LLC and Pool 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 Pool Corporation 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 Pool i.e., Pool and Coupang LLC go up and down completely randomly.

Pair Corralation between Pool and Coupang LLC

Given the investment horizon of 90 days Pool Corporation is expected to under-perform the Coupang LLC. But the stock apears to be less risky and, when comparing its historical volatility, Pool Corporation is 1.23 times less risky than Coupang LLC. The stock trades about 0.0 of its potential returns per unit of risk. The Coupang LLC is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,384  in Coupang LLC on October 2, 2024 and sell it today you would earn a total of  833.00  from holding Coupang LLC or generate 60.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Pool Corp.  vs.  Coupang LLC

Pool

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pool Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

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.

Pair Trading with Pool and Coupang LLC

The main advantage of trading using opposite Pool and Coupang LLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pool 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 Pool Corporation 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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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 CEOs Directory module to screen CEOs from public companies around the world.