Correlation Between Luckin Coffee and Boiron SA
Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and Boiron SA 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 Boiron SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luckin Coffee and Boiron SA, you can compare the effects of market volatilities on Luckin Coffee and Boiron SA 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 Boiron SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and Boiron SA.
Diversification Opportunities for Luckin Coffee and Boiron SA
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Luckin and Boiron is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and Boiron SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boiron SA 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 Boiron SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boiron SA has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and Boiron SA go up and down completely randomly.
Pair Corralation between Luckin Coffee and Boiron SA
Assuming the 90 days trading horizon Luckin Coffee is expected to generate 2.09 times more return on investment than Boiron SA. However, Luckin Coffee is 2.09 times more volatile than Boiron SA. It trades about 0.03 of its potential returns per unit of risk. Boiron SA is currently generating about -0.01 per unit of risk. If you would invest 2,105 in Luckin Coffee on October 13, 2024 and sell it today you would earn a total of 235.00 from holding Luckin Coffee or generate 11.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luckin Coffee vs. Boiron SA
Performance |
| Timeline |
| Luckin Coffee |
| Boiron SA |
Luckin Coffee and Boiron SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luckin Coffee and Boiron SA
The main advantage of trading using opposite Luckin Coffee and Boiron SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, Boiron SA 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 Boiron SA will offset losses from the drop in Boiron SA's long position.| Luckin Coffee vs. Cincinnati Financial Corp | Luckin Coffee vs. CVB Financial Corp | Luckin Coffee vs. Webster Financial | Luckin Coffee vs. GALENA MINING LTD |
| Boiron SA vs. Luckin Coffee | Boiron SA vs. AOYAMA TRADING | Boiron SA vs. SWISS WATER DECAFFCOFFEE | Boiron SA vs. Scottish Mortgage Investment |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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