Correlation Between FIDELITY and Coupang LLC

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

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

Diversification Opportunities for FIDELITY and Coupang LLC

0.04

Correlation Coefficient

FIDELITY  Coupang LLC

Significant diversification

The 3 months correlation between FIDELITY and Coupang is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding FIDELITY NATIONAL INFORMATION and Coupang LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coupang LLC and FIDELITY 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 FIDELITY NATIONAL INFORMATION 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 FIDELITY i.e., FIDELITY and Coupang LLC go up and down completely randomly.

Pair Corralation between FIDELITY and Coupang LLC

Assuming the 90 days trading horizon FIDELITY NATIONAL INFORMATION is expected to generate 0.49 times more return on investment than Coupang LLC. However, FIDELITY NATIONAL INFORMATION is 2.03 times less risky than Coupang LLC. It trades about 0.23 of its potential returns per unit of risk. Coupang LLC is currently generating about -0.16 per unit of risk. If you would invest  8,527  in FIDELITY NATIONAL INFORMATION on September 15, 2024 and sell it today you would earn a total of  297.00  from holding FIDELITY NATIONAL INFORMATION or generate 3.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

FIDELITY NATIONAL INFORMATION  vs.  Coupang LLC

FIDELITY NATIONAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FIDELITY NATIONAL INFORMATION has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, FIDELITY is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 nearly stable basic indicators, Coupang LLC is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with FIDELITY and Coupang LLC

The main advantage of trading using opposite FIDELITY and Coupang LLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIDELITY 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 FIDELITY NATIONAL INFORMATION 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.