Correlation Between AGRICUL BK and Luckin Coffee
Can any of the company-specific risk be diversified away by investing in both AGRICUL BK 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 AGRICUL BK and Luckin Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGRICUL BK CHINA H and Luckin Coffee, you can compare the effects of market volatilities on AGRICUL BK 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 AGRICUL BK with a short position of Luckin Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICUL BK and Luckin Coffee.
Diversification Opportunities for AGRICUL BK and Luckin Coffee
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AGRICUL and Luckin is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding AGRICUL BK CHINA H and Luckin Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luckin Coffee and AGRICUL BK 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 AGRICUL BK CHINA H 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 AGRICUL BK i.e., AGRICUL BK and Luckin Coffee go up and down completely randomly.
Pair Corralation between AGRICUL BK and Luckin Coffee
Assuming the 90 days trading horizon AGRICUL BK CHINA H is expected to generate 1.46 times more return on investment than Luckin Coffee. However, AGRICUL BK is 1.46 times more volatile than Luckin Coffee. It trades about 0.06 of its potential returns per unit of risk. Luckin Coffee is currently generating about 0.02 per unit of risk. If you would invest 13.00 in AGRICUL BK CHINA H on September 3, 2024 and sell it today you would earn a total of 33.00 from holding AGRICUL BK CHINA H or generate 253.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGRICUL BK CHINA H vs. Luckin Coffee
Performance |
| Timeline |
| AGRICUL BK CHINA |
| Luckin Coffee |
AGRICUL BK and Luckin Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGRICUL BK and Luckin Coffee
The main advantage of trading using opposite AGRICUL BK and Luckin Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICUL BK 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.| AGRICUL BK vs. ANTA SPORTS PRODUCT | AGRICUL BK vs. Perseus Mining Limited | AGRICUL BK vs. Jacquet Metal Service | AGRICUL BK vs. Playa Hotels Resorts |
| 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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