Correlation Between Luckin Coffee and AEON STORES
Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and AEON STORES 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 AEON STORES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luckin Coffee and AEON STORES, you can compare the effects of market volatilities on Luckin Coffee and AEON STORES 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 AEON STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and AEON STORES.
Diversification Opportunities for Luckin Coffee and AEON STORES
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Luckin and AEON is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and AEON STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON STORES 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 AEON STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON STORES has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and AEON STORES go up and down completely randomly.
Pair Corralation between Luckin Coffee and AEON STORES
If you would invest 2,140 in Luckin Coffee on September 13, 2024 and sell it today you would earn a total of 160.00 from holding Luckin Coffee or generate 7.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luckin Coffee vs. AEON STORES
Performance |
| Timeline |
| Luckin Coffee |
| AEON STORES |
Luckin Coffee and AEON STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luckin Coffee and AEON STORES
The main advantage of trading using opposite Luckin Coffee and AEON STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, AEON STORES 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 AEON STORES will offset losses from the drop in AEON STORES's long position.| Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc |
| AEON STORES vs. Apple Inc | AEON STORES vs. Apple Inc | AEON STORES vs. Apple Inc | AEON STORES vs. Apple Inc |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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