Correlation Between Indonesia Energy and Luckin Coffee
Can any of the company-specific risk be diversified away by investing in both Indonesia Energy 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 Indonesia Energy and Luckin Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indonesia Energy and Luckin Coffee, you can compare the effects of market volatilities on Indonesia Energy 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 Indonesia Energy with a short position of Luckin Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indonesia Energy and Luckin Coffee.
Diversification Opportunities for Indonesia Energy and Luckin Coffee
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indonesia and Luckin is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Indonesia Energy and Luckin Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luckin Coffee and Indonesia Energy 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 Indonesia Energy 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 Indonesia Energy i.e., Indonesia Energy and Luckin Coffee go up and down completely randomly.
Pair Corralation between Indonesia Energy and Luckin Coffee
If you would invest 2,676 in Luckin Coffee on September 5, 2024 and sell it today you would earn a total of 0.00 from holding Luckin Coffee or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Indonesia Energy vs. Luckin Coffee
Performance |
| Timeline |
| Indonesia Energy |
| Luckin Coffee |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Indonesia Energy and Luckin Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indonesia Energy and Luckin Coffee
The main advantage of trading using opposite Indonesia Energy and Luckin Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indonesia Energy 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.| Indonesia Energy vs. Houston American Energy | Indonesia Energy vs. Barnwell Industries | Indonesia Energy vs. Mexco Energy | Indonesia Energy vs. PHX Minerals |
| Luckin Coffee vs. Shake Shack | Luckin Coffee vs. Dominos Pizza | Luckin Coffee vs. Papa Johns International | Luckin Coffee vs. Chipotle Mexican Grill |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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