Correlation Between PT Global and Luckin Coffee
Can any of the company-specific risk be diversified away by investing in both PT Global and Luckin Coffee 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 PT Global and Luckin Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Global Mediacom and Luckin Coffee, you can compare the effects of market volatilities on PT Global and Luckin Coffee 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 PT Global with a short position of Luckin Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Global and Luckin Coffee.
Diversification Opportunities for PT Global and Luckin Coffee
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 06L and Luckin is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding PT Global Mediacom and Luckin Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luckin Coffee and PT Global 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 PT Global Mediacom are associated (or correlated) with Luckin Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luckin Coffee has no effect on the direction of PT Global i.e., PT Global and Luckin Coffee go up and down completely randomly.
Pair Corralation between PT Global and Luckin Coffee
Assuming the 90 days trading horizon PT Global Mediacom is expected to under-perform the Luckin Coffee. In addition to that, PT Global is 1.07 times more volatile than Luckin Coffee. It trades about -0.15 of its total potential returns per unit of risk. Luckin Coffee is currently generating about 0.04 per unit of volatility. If you would invest 2,160 in Luckin Coffee on September 20, 2024 and sell it today you would earn a total of 40.00 from holding Luckin Coffee or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Global Mediacom vs. Luckin Coffee
Performance |
| Timeline |
| PT Global Mediacom |
| Luckin Coffee |
PT Global and Luckin Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Global and Luckin Coffee
The main advantage of trading using opposite PT Global and Luckin Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Global position performs unexpectedly, Luckin Coffee 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 Luckin Coffee will offset losses from the drop in Luckin Coffee's long position.| PT Global vs. The Walt Disney | PT Global vs. Charter Communications | PT Global vs. Superior Plus Corp | PT Global vs. SIVERS SEMICONDUCTORS AB |
| Luckin Coffee vs. PT Global Mediacom | Luckin Coffee vs. International Game Technology | Luckin Coffee vs. Ubisoft Entertainment SA | Luckin Coffee vs. GameStop Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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