Correlation Between SBC Medical and Coupang LLC

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

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

Diversification Opportunities for SBC Medical and Coupang LLC

-0.21

Correlation Coefficient

SBC Medical  Coupang LLC

Very good diversification

The 3 months correlation between SBC and Coupang is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding SBC Medical Group and Coupang LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coupang LLC and SBC Medical 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 SBC Medical Group 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 SBC Medical i.e., SBC Medical and Coupang LLC go up and down completely randomly.

Pair Corralation between SBC Medical and Coupang LLC

Assuming the 90 days horizon SBC Medical Group is expected to generate 5.34 times more return on investment than Coupang LLC. However, SBC Medical is 5.34 times more volatile than Coupang LLC. It trades about 0.18 of its potential returns per unit of risk. Coupang LLC is currently generating about 0.04 per unit of risk. If you would invest  7.31  in SBC Medical Group on October 4, 2024 and sell it today you would earn a total of  16.79  from holding SBC Medical Group or generate 229.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	15.12%
Values	Daily Returns

SBC Medical Group  vs.  Coupang LLC

SBC Medical Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SBC Medical Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, SBC Medical showed solid returns over the last few months and may actually be approaching a breakup point.

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 SBC Medical and Coupang LLC

The main advantage of trading using opposite SBC Medical and Coupang LLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBC Medical 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 SBC Medical Group 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.