Correlation Between Haitong Securities and Luckin Coffee
Can any of the company-specific risk be diversified away by investing in both Haitong Securities 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 Haitong Securities and Luckin Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haitong Securities Co and Luckin Coffee, you can compare the effects of market volatilities on Haitong Securities 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 Haitong Securities with a short position of Luckin Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haitong Securities and Luckin Coffee.
Diversification Opportunities for Haitong Securities and Luckin Coffee
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Haitong and Luckin is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Haitong Securities Co and Luckin Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luckin Coffee and Haitong Securities 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 Haitong Securities Co 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 Haitong Securities i.e., Haitong Securities and Luckin Coffee go up and down completely randomly.
Pair Corralation between Haitong Securities and Luckin Coffee
Assuming the 90 days horizon Haitong Securities is expected to generate 2.35 times less return on investment than Luckin Coffee. But when comparing it to its historical volatility, Haitong Securities Co is 2.21 times less risky than Luckin Coffee. It trades about 0.09 of its potential returns per unit of risk. Luckin Coffee is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,140 in Luckin Coffee on September 13, 2024 and sell it today you would earn a total of 160.00 from holding Luckin Coffee or generate 7.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Haitong Securities Co vs. Luckin Coffee
Performance |
| Timeline |
| Haitong Securities |
| Luckin Coffee |
Haitong Securities and Luckin Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haitong Securities and Luckin Coffee
The main advantage of trading using opposite Haitong Securities and Luckin Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haitong Securities 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.| Haitong Securities vs. Superior Plus Corp | Haitong Securities vs. SIVERS SEMICONDUCTORS AB | Haitong Securities vs. CHINA HUARONG ENERHD 50 | Haitong Securities vs. NORDIC HALIBUT AS |
| Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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