Correlation Between INTERCONT HOTELS and Luckin Coffee
Can any of the company-specific risk be diversified away by investing in both INTERCONT 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 INTERCONT 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 INTERCONT HOTELS and Luckin Coffee, you can compare the effects of market volatilities on INTERCONT 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 INTERCONT HOTELS with a short position of Luckin Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and Luckin Coffee.
Diversification Opportunities for INTERCONT HOTELS and Luckin Coffee
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INTERCONT and Luckin is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and Luckin Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luckin Coffee and INTERCONT 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 INTERCONT HOTELS 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 INTERCONT HOTELS i.e., INTERCONT HOTELS and Luckin Coffee go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and Luckin Coffee
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 0.68 times more return on investment than Luckin Coffee. However, INTERCONT HOTELS is 1.48 times less risky than Luckin Coffee. It trades about 0.25 of its potential returns per unit of risk. Luckin Coffee is currently generating about -0.21 per unit of risk. If you would invest 10,200 in INTERCONT HOTELS on September 1, 2024 and sell it today you would earn a total of 1,600 from holding INTERCONT HOTELS or generate 15.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTERCONT HOTELS vs. Luckin Coffee
Performance |
| Timeline |
| INTERCONT HOTELS |
| Luckin Coffee |
INTERCONT HOTELS and Luckin Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERCONT HOTELS and Luckin Coffee
The main advantage of trading using opposite INTERCONT HOTELS and Luckin Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT 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.| INTERCONT HOTELS vs. Packaging of | INTERCONT HOTELS vs. ERSTE GP BNK | INTERCONT HOTELS vs. W R Berkley | INTERCONT HOTELS vs. News Corporation |
| 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.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |