Correlation Between Luckin Coffee and SYLVANIA PLAT
Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and SYLVANIA PLAT 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 SYLVANIA PLAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luckin Coffee and SYLVANIA PLAT DL, you can compare the effects of market volatilities on Luckin Coffee and SYLVANIA PLAT 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 SYLVANIA PLAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and SYLVANIA PLAT.
Diversification Opportunities for Luckin Coffee and SYLVANIA PLAT
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Luckin and SYLVANIA is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and SYLVANIA PLAT DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYLVANIA PLAT DL 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 SYLVANIA PLAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYLVANIA PLAT DL has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and SYLVANIA PLAT go up and down completely randomly.
Pair Corralation between Luckin Coffee and SYLVANIA PLAT
Assuming the 90 days trading horizon Luckin Coffee is expected to generate 1.04 times more return on investment than SYLVANIA PLAT. However, Luckin Coffee is 1.04 times more volatile than SYLVANIA PLAT DL. It trades about 0.02 of its potential returns per unit of risk. SYLVANIA PLAT DL is currently generating about -0.01 per unit of risk. If you would invest 2,199 in Luckin Coffee on September 12, 2024 and sell it today you would earn a total of 101.00 from holding Luckin Coffee or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luckin Coffee vs. SYLVANIA PLAT DL
Performance |
| Timeline |
| Luckin Coffee |
| SYLVANIA PLAT DL |
Luckin Coffee and SYLVANIA PLAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luckin Coffee and SYLVANIA PLAT
The main advantage of trading using opposite Luckin Coffee and SYLVANIA PLAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, SYLVANIA PLAT 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 SYLVANIA PLAT will offset losses from the drop in SYLVANIA PLAT's long position.| Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc |
| SYLVANIA PLAT vs. American Homes 4 | SYLVANIA PLAT vs. Tri Pointe Homes | SYLVANIA PLAT vs. Luckin Coffee | SYLVANIA PLAT vs. Hollywood Bowl Group |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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