Correlation Between Luckin Coffee and ARDAGH METAL
Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and ARDAGH METAL 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 ARDAGH METAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luckin Coffee and ARDAGH METAL PACDL 0001, you can compare the effects of market volatilities on Luckin Coffee and ARDAGH METAL 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 ARDAGH METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and ARDAGH METAL.
Diversification Opportunities for Luckin Coffee and ARDAGH METAL
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Luckin and ARDAGH is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and ARDAGH METAL PACDL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARDAGH METAL PACDL 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 ARDAGH METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARDAGH METAL PACDL has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and ARDAGH METAL go up and down completely randomly.
Pair Corralation between Luckin Coffee and ARDAGH METAL
Assuming the 90 days trading horizon Luckin Coffee is expected to generate 1.01 times more return on investment than ARDAGH METAL. However, Luckin Coffee is 1.01 times more volatile than ARDAGH METAL PACDL 0001. It trades about -0.01 of its potential returns per unit of risk. ARDAGH METAL PACDL 0001 is currently generating about -0.1 per unit of risk. If you would invest 2,260 in Luckin Coffee on September 15, 2024 and sell it today you would lose (60.00) from holding Luckin Coffee or give up 2.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luckin Coffee vs. ARDAGH METAL PACDL 0001
Performance |
| Timeline |
| Luckin Coffee |
| ARDAGH METAL PACDL |
Luckin Coffee and ARDAGH METAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luckin Coffee and ARDAGH METAL
The main advantage of trading using opposite Luckin Coffee and ARDAGH METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, ARDAGH METAL 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 ARDAGH METAL will offset losses from the drop in ARDAGH METAL's long position.| Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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