Correlation Between ScanSource and Coupang LLC

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

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

Diversification Opportunities for ScanSource and Coupang LLC

0.94

Correlation Coefficient

ScanSource  Coupang LLC

Almost no diversification

The 3 months correlation between ScanSource and Coupang is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and Coupang LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coupang LLC and ScanSource 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 ScanSource 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 ScanSource i.e., ScanSource and Coupang LLC go up and down completely randomly.

Pair Corralation between ScanSource and Coupang LLC

Given the investment horizon of 90 days ScanSource is expected to under-perform the Coupang LLC. In addition to that, ScanSource is 1.55 times more volatile than Coupang LLC. It trades about -0.02 of its total potential returns per unit of risk. Coupang LLC is currently generating about 0.25 per unit of volatility. If you would invest  2,684  in Coupang LLC on March 16, 2025 and sell it today you would earn a total of  147.00  from holding Coupang LLC or generate 5.48% return on investment over 90 days.

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

ScanSource  vs.  Coupang LLC

ScanSource

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ScanSource are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, ScanSource may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Coupang LLC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Coupang LLC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Coupang LLC reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ScanSource and Coupang LLC

The main advantage of trading using opposite ScanSource and Coupang LLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanSource 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 ScanSource 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.