Correlation Between Luckin Coffee and EON SE
Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and EON SE 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 EON SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luckin Coffee and EON SE, you can compare the effects of market volatilities on Luckin Coffee and EON SE 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 EON SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and EON SE.
Diversification Opportunities for Luckin Coffee and EON SE
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Luckin and EON is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and EON SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EON SE 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 EON SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EON SE has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and EON SE go up and down completely randomly.
Pair Corralation between Luckin Coffee and EON SE
Assuming the 90 days trading horizon Luckin Coffee is expected to generate 2.98 times more return on investment than EON SE. However, Luckin Coffee is 2.98 times more volatile than EON SE. It trades about 0.16 of its potential returns per unit of risk. EON SE is currently generating about 0.44 per unit of risk. If you would invest 2,600 in Luckin Coffee on November 27, 2024 and sell it today you would earn a total of 220.00 from holding Luckin Coffee or generate 8.46% 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. EON SE
Performance |
| Timeline |
| Luckin Coffee |
| EON SE |
Luckin Coffee and EON SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luckin Coffee and EON SE
The main advantage of trading using opposite Luckin Coffee and EON SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, EON SE 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 EON SE will offset losses from the drop in EON SE's long position.| Luckin Coffee vs. Uber Technologies | Luckin Coffee vs. Genscript Biotech | Luckin Coffee vs. SOFI TECHNOLOGIES | Luckin Coffee vs. Easy Software AG |
| EON SE vs. CHAMPION IRON | EON SE vs. Tower Semiconductor | EON SE vs. MOUNT GIBSON IRON | EON SE vs. Lattice Semiconductor |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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