Correlation Between COVIVIO HOTELS and Luckin Coffee
Can any of the company-specific risk be diversified away by investing in both COVIVIO HOTELS 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 COVIVIO HOTELS and Luckin Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COVIVIO HOTELS INH and Luckin Coffee, you can compare the effects of market volatilities on COVIVIO HOTELS 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 COVIVIO HOTELS with a short position of Luckin Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of COVIVIO HOTELS and Luckin Coffee.
Diversification Opportunities for COVIVIO HOTELS and Luckin Coffee
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between COVIVIO and Luckin is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding COVIVIO HOTELS INH and Luckin Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luckin Coffee and COVIVIO HOTELS 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 COVIVIO HOTELS INH 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 COVIVIO HOTELS i.e., COVIVIO HOTELS and Luckin Coffee go up and down completely randomly.
Pair Corralation between COVIVIO HOTELS and Luckin Coffee
Assuming the 90 days horizon COVIVIO HOTELS INH is expected to generate 0.13 times more return on investment than Luckin Coffee. However, COVIVIO HOTELS INH is 7.97 times less risky than Luckin Coffee. It trades about -0.14 of its potential returns per unit of risk. Luckin Coffee is currently generating about -0.21 per unit of risk. If you would invest 1,850 in COVIVIO HOTELS INH on September 1, 2024 and sell it today you would lose (30.00) from holding COVIVIO HOTELS INH or give up 1.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COVIVIO HOTELS INH vs. Luckin Coffee
Performance |
| Timeline |
| COVIVIO HOTELS INH |
| Luckin Coffee |
COVIVIO HOTELS and Luckin Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COVIVIO HOTELS and Luckin Coffee
The main advantage of trading using opposite COVIVIO HOTELS and Luckin Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COVIVIO HOTELS 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.| COVIVIO HOTELS vs. Apple Inc | COVIVIO HOTELS vs. Apple Inc | COVIVIO HOTELS vs. Apple Inc | COVIVIO HOTELS vs. Apple Inc |
| Luckin Coffee vs. United Natural Foods | Luckin Coffee vs. TreeHouse Foods | Luckin Coffee vs. WILLIS LEASE FIN | Luckin Coffee vs. Sixt Leasing SE |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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