Correlation Between Luckin Coffee and SANOK RUBBER
Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and SANOK RUBBER 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 SANOK RUBBER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luckin Coffee and SANOK RUBBER ZY, you can compare the effects of market volatilities on Luckin Coffee and SANOK RUBBER 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 SANOK RUBBER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and SANOK RUBBER.
Diversification Opportunities for Luckin Coffee and SANOK RUBBER
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Luckin and SANOK is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and SANOK RUBBER ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANOK RUBBER ZY 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 SANOK RUBBER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANOK RUBBER ZY has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and SANOK RUBBER go up and down completely randomly.
Pair Corralation between Luckin Coffee and SANOK RUBBER
Assuming the 90 days trading horizon Luckin Coffee is expected to generate 2.21 times more return on investment than SANOK RUBBER. However, Luckin Coffee is 2.21 times more volatile than SANOK RUBBER ZY. It trades about 0.12 of its potential returns per unit of risk. SANOK RUBBER ZY is currently generating about 0.17 per unit of risk. If you would invest 2,280 in Luckin Coffee on November 7, 2024 and sell it today you would earn a total of 540.00 from holding Luckin Coffee or generate 23.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luckin Coffee vs. SANOK RUBBER ZY
Performance |
| Timeline |
| Luckin Coffee |
| SANOK RUBBER ZY |
Luckin Coffee and SANOK RUBBER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luckin Coffee and SANOK RUBBER
The main advantage of trading using opposite Luckin Coffee and SANOK RUBBER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, SANOK RUBBER 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 SANOK RUBBER will offset losses from the drop in SANOK RUBBER's long position.| Luckin Coffee vs. Burlington Stores | Luckin Coffee vs. CORNISH METALS INC | Luckin Coffee vs. GOME Retail Holdings | Luckin Coffee vs. Japan Tobacco |
| SANOK RUBBER vs. United Microelectronics Corp | SANOK RUBBER vs. Sumitomo Rubber Industries | SANOK RUBBER vs. Applied Materials | SANOK RUBBER vs. Electronic Arts |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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