Correlation Between EIDESVIK OFFSHORE and Luckin Coffee
Can any of the company-specific risk be diversified away by investing in both EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE and Luckin Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EIDESVIK OFFSHORE NK and Luckin Coffee, you can compare the effects of market volatilities on EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE with a short position of Luckin Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of EIDESVIK OFFSHORE and Luckin Coffee.
Diversification Opportunities for EIDESVIK OFFSHORE and Luckin Coffee
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EIDESVIK and Luckin is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding EIDESVIK OFFSHORE NK and Luckin Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luckin Coffee and EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE NK 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 EIDESVIK OFFSHORE i.e., EIDESVIK OFFSHORE and Luckin Coffee go up and down completely randomly.
Pair Corralation between EIDESVIK OFFSHORE and Luckin Coffee
Assuming the 90 days horizon EIDESVIK OFFSHORE NK is expected to generate 0.76 times more return on investment than Luckin Coffee. However, EIDESVIK OFFSHORE NK is 1.31 times less risky than Luckin Coffee. It trades about 0.05 of its potential returns per unit of risk. Luckin Coffee is currently generating about 0.02 per unit of risk. If you would invest 66.00 in EIDESVIK OFFSHORE NK on September 2, 2024 and sell it today you would earn a total of 44.00 from holding EIDESVIK OFFSHORE NK or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EIDESVIK OFFSHORE NK vs. Luckin Coffee
Performance |
| Timeline |
| EIDESVIK OFFSHORE |
| Luckin Coffee |
EIDESVIK OFFSHORE and Luckin Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EIDESVIK OFFSHORE and Luckin Coffee
The main advantage of trading using opposite EIDESVIK OFFSHORE and Luckin Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EIDESVIK OFFSHORE 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.| EIDESVIK OFFSHORE vs. Scandinavian Tobacco Group | EIDESVIK OFFSHORE vs. MI Homes | EIDESVIK OFFSHORE vs. Ares Management Corp | EIDESVIK OFFSHORE vs. Perdoceo Education |
| Luckin Coffee vs. ALBIS LEASING AG | Luckin Coffee vs. NEWELL RUBBERMAID | Luckin Coffee vs. ETFS Coffee ETC | Luckin Coffee vs. Vulcan Materials |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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