Correlation Between AEON STORES and Luckin Coffee
Can any of the company-specific risk be diversified away by investing in both AEON STORES 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 AEON STORES and Luckin Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEON STORES and Luckin Coffee, you can compare the effects of market volatilities on AEON STORES 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 AEON STORES with a short position of Luckin Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEON STORES and Luckin Coffee.
Diversification Opportunities for AEON STORES and Luckin Coffee
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AEON and Luckin is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding AEON STORES and Luckin Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luckin Coffee and AEON STORES 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 AEON STORES 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 AEON STORES i.e., AEON STORES and Luckin Coffee go up and down completely randomly.
Pair Corralation between AEON STORES and Luckin Coffee
If you would invest 2,320 in Luckin Coffee on September 13, 2024 and sell it today you would lose (20.00) from holding Luckin Coffee or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEON STORES vs. Luckin Coffee
Performance |
| Timeline |
| AEON STORES |
| Luckin Coffee |
AEON STORES and Luckin Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEON STORES and Luckin Coffee
The main advantage of trading using opposite AEON STORES and Luckin Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEON STORES 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.| AEON STORES vs. Apple Inc | AEON STORES vs. Apple Inc | AEON STORES vs. Apple Inc | AEON STORES vs. Apple Inc |
| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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