Correlation Between Weyco and Coupang LLC

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

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

Diversification Opportunities for Weyco and Coupang LLC

-0.45

Correlation Coefficient

Weyco  Coupang LLC

Very good diversification

The 3 months correlation between Weyco and Coupang is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and Coupang LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coupang LLC and Weyco 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 Weyco 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 Weyco i.e., Weyco and Coupang LLC go up and down completely randomly.

Pair Corralation between Weyco and Coupang LLC

Given the investment horizon of 90 days Weyco is expected to generate 2.05 times less return on investment than Coupang LLC. In addition to that, Weyco is 1.04 times more volatile than Coupang LLC. It trades about 0.05 of its total potential returns per unit of risk. Coupang LLC is currently generating about 0.1 per unit of volatility. 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 Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Weyco Group  vs.  Coupang LLC

Weyco Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Weyco Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Weyco unveiled 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 Weyco and Coupang LLC

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

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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.