Correlation Between CITY OFFICE and Luckin Coffee
Can any of the company-specific risk be diversified away by investing in both CITY OFFICE 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 CITY OFFICE and Luckin Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CITY OFFICE REIT and Luckin Coffee, you can compare the effects of market volatilities on CITY OFFICE 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 CITY OFFICE with a short position of Luckin Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and Luckin Coffee.
Diversification Opportunities for CITY OFFICE and Luckin Coffee
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CITY and Luckin is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT and Luckin Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luckin Coffee and CITY OFFICE 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 CITY OFFICE REIT 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 CITY OFFICE i.e., CITY OFFICE and Luckin Coffee go up and down completely randomly.
Pair Corralation between CITY OFFICE and Luckin Coffee
Assuming the 90 days horizon CITY OFFICE REIT is expected to generate 0.63 times more return on investment than Luckin Coffee. However, CITY OFFICE REIT is 1.58 times less risky than Luckin Coffee. It trades about 0.02 of its potential returns per unit of risk. Luckin Coffee is currently generating about 0.0 per unit of risk. If you would invest 482.00 in CITY OFFICE REIT on August 28, 2024 and sell it today you would earn a total of 2.00 from holding CITY OFFICE REIT or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITY OFFICE REIT vs. Luckin Coffee
Performance |
| Timeline |
| CITY OFFICE REIT |
| Luckin Coffee |
CITY OFFICE and Luckin Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITY OFFICE and Luckin Coffee
The main advantage of trading using opposite CITY OFFICE and Luckin Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITY OFFICE 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.| CITY OFFICE vs. HK Electric Investments | CITY OFFICE vs. SLR Investment Corp | CITY OFFICE vs. National Beverage Corp | CITY OFFICE vs. REINET INVESTMENTS SCA |
| Luckin Coffee vs. Coeur Mining | Luckin Coffee vs. Lion One Metals | Luckin Coffee vs. American Airlines Group | Luckin Coffee vs. KENNAMETAL INC |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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