Correlation Between MOVIE GAMES and Luckin Coffee
Can any of the company-specific risk be diversified away by investing in both MOVIE GAMES 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 MOVIE GAMES and Luckin Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MOVIE GAMES SA and Luckin Coffee, you can compare the effects of market volatilities on MOVIE GAMES 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 MOVIE GAMES with a short position of Luckin Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOVIE GAMES and Luckin Coffee.
Diversification Opportunities for MOVIE GAMES and Luckin Coffee
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MOVIE and Luckin is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding MOVIE GAMES SA and Luckin Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luckin Coffee and MOVIE GAMES 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 MOVIE GAMES SA 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 MOVIE GAMES i.e., MOVIE GAMES and Luckin Coffee go up and down completely randomly.
Pair Corralation between MOVIE GAMES and Luckin Coffee
Assuming the 90 days horizon MOVIE GAMES SA is expected to generate 2.12 times more return on investment than Luckin Coffee. However, MOVIE GAMES is 2.12 times more volatile than Luckin Coffee. It trades about 0.19 of its potential returns per unit of risk. Luckin Coffee is currently generating about 0.12 per unit of risk. If you would invest 351.00 in MOVIE GAMES SA on November 7, 2024 and sell it today you would earn a total of 63.00 from holding MOVIE GAMES SA or generate 17.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
MOVIE GAMES SA vs. Luckin Coffee
Performance |
| Timeline |
| MOVIE GAMES SA |
| Luckin Coffee |
MOVIE GAMES and Luckin Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOVIE GAMES and Luckin Coffee
The main advantage of trading using opposite MOVIE GAMES and Luckin Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOVIE GAMES 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.| MOVIE GAMES vs. PACIFIC ONLINE | MOVIE GAMES vs. Singapore Reinsurance | MOVIE GAMES vs. Zurich Insurance Group | MOVIE GAMES vs. Direct Line Insurance |
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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 the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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