Correlation Between Coupang LLC and 3M

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Can any of the company-specific risk be diversified away by investing in both Coupang LLC and 3M 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 Coupang LLC and 3M into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coupang LLC and 3M Company, you can compare the effects of market volatilities on Coupang LLC and 3M 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 Coupang LLC with a short position of 3M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coupang LLC and 3M.

Diversification Opportunities for Coupang LLC and 3M

0.37
  Correlation Coefficient

Weak diversification

The 3 months correlation between Coupang and 3M is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Coupang LLC and 3M Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3M Company and Coupang LLC 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 Coupang LLC are associated (or correlated) with 3M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3M Company has no effect on the direction of Coupang LLC i.e., Coupang LLC and 3M go up and down completely randomly.

Pair Corralation between Coupang LLC and 3M

Given the investment horizon of 90 days Coupang LLC is expected to under-perform the 3M. In addition to that, Coupang LLC is 3.07 times more volatile than 3M Company. It trades about -0.03 of its total potential returns per unit of risk. 3M Company is currently generating about -0.02 per unit of volatility. If you would invest  15,725  in 3M Company on September 9, 2022 and sell it today you would lose (3,090)  from holding 3M Company or give up 19.65% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy92.47%
ValuesDaily Returns

Coupang LLC  vs.  3M Company

 Performance (%) 
       Timeline  
Coupang LLC 
Coupang Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Coupang LLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Coupang LLC may actually be approaching a critical reversion point that can send shares even higher in January 2023.

Coupang Price Channel

3M Company 
3M Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in 3M Company are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively steady primary indicators, 3M is not utilizing all of its potentials. The new stock price chaos, may contribute to medium-term losses for the stakeholders.

3M Price Channel

Coupang LLC and 3M Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Coupang LLC and 3M

The main advantage of trading using opposite Coupang LLC and 3M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coupang LLC position performs unexpectedly, 3M 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 3M will offset losses from the drop in 3M's long position.
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The idea behind Coupang LLC and 3M Company 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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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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