Correlation Between Luckin Coffee and BORR DRILLING
Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and BORR DRILLING 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 BORR DRILLING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luckin Coffee and BORR DRILLING NEW, you can compare the effects of market volatilities on Luckin Coffee and BORR DRILLING 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 BORR DRILLING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and BORR DRILLING.
Diversification Opportunities for Luckin Coffee and BORR DRILLING
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Luckin and BORR is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and BORR DRILLING NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BORR DRILLING NEW 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 BORR DRILLING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BORR DRILLING NEW has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and BORR DRILLING go up and down completely randomly.
Pair Corralation between Luckin Coffee and BORR DRILLING
Assuming the 90 days trading horizon Luckin Coffee is expected to generate 1.38 times more return on investment than BORR DRILLING. However, Luckin Coffee is 1.38 times more volatile than BORR DRILLING NEW. It trades about 0.02 of its potential returns per unit of risk. BORR DRILLING NEW is currently generating about 0.01 per unit of risk. If you would invest 2,071 in Luckin Coffee on August 26, 2024 and sell it today you would lose (51.00) from holding Luckin Coffee or give up 2.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luckin Coffee vs. BORR DRILLING NEW
Performance |
| Timeline |
| Luckin Coffee |
| BORR DRILLING NEW |
Luckin Coffee and BORR DRILLING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luckin Coffee and BORR DRILLING
The main advantage of trading using opposite Luckin Coffee and BORR DRILLING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, BORR DRILLING 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 BORR DRILLING will offset losses from the drop in BORR DRILLING's long position.| Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc |
| BORR DRILLING vs. Soken Chemical Engineering | BORR DRILLING vs. Quaker Chemical | BORR DRILLING vs. TIANDE CHEMICAL | BORR DRILLING vs. HOCHSCHILD MINING |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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