Correlation Between Luckin Coffee and Aya Gold
Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and Aya Gold 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 Luckin Coffee and Aya Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luckin Coffee and Aya Gold Silver, you can compare the effects of market volatilities on Luckin Coffee and Aya Gold 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 Luckin Coffee with a short position of Aya Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and Aya Gold.
Diversification Opportunities for Luckin Coffee and Aya Gold
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Luckin and Aya is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and Aya Gold Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aya Gold Silver and Luckin Coffee 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 Luckin Coffee are associated (or correlated) with Aya Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aya Gold Silver has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and Aya Gold go up and down completely randomly.
Pair Corralation between Luckin Coffee and Aya Gold
Assuming the 90 days trading horizon Luckin Coffee is expected to generate 0.97 times more return on investment than Aya Gold. However, Luckin Coffee is 1.03 times less risky than Aya Gold. It trades about 0.21 of its potential returns per unit of risk. Aya Gold Silver is currently generating about 0.13 per unit of risk. If you would invest 2,280 in Luckin Coffee on October 30, 2024 and sell it today you would earn a total of 320.00 from holding Luckin Coffee or generate 14.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luckin Coffee vs. Aya Gold Silver
Performance |
| Timeline |
| Luckin Coffee |
| Aya Gold Silver |
Luckin Coffee and Aya Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luckin Coffee and Aya Gold
The main advantage of trading using opposite Luckin Coffee and Aya Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, Aya Gold 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 Aya Gold will offset losses from the drop in Aya Gold's long position.| Luckin Coffee vs. MOVIE GAMES SA | Luckin Coffee vs. PATTIES FOODS | Luckin Coffee vs. Maple Leaf Foods | Luckin Coffee vs. Ultra Clean Holdings |
| Aya Gold vs. Cardinal Health | Aya Gold vs. PURE FOODS TASMANIA | Aya Gold vs. OPKO HEALTH | Aya Gold vs. Molson Coors Beverage |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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