Correlation Between Luckin Coffee and GIYANI GOLD
Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and GIYANI GOLD 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 GIYANI GOLD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luckin Coffee and GIYANI GOLD, you can compare the effects of market volatilities on Luckin Coffee and GIYANI GOLD 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 GIYANI GOLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and GIYANI GOLD.
Diversification Opportunities for Luckin Coffee and GIYANI GOLD
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Luckin and GIYANI is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and GIYANI GOLD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GIYANI GOLD 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 GIYANI GOLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GIYANI GOLD has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and GIYANI GOLD go up and down completely randomly.
Pair Corralation between Luckin Coffee and GIYANI GOLD
Assuming the 90 days trading horizon Luckin Coffee is expected to generate 5.47 times more return on investment than GIYANI GOLD. However, Luckin Coffee is 5.47 times more volatile than GIYANI GOLD. It trades about 0.0 of its potential returns per unit of risk. GIYANI GOLD is currently generating about -0.17 per unit of risk. If you would invest 2,880 in Luckin Coffee on September 14, 2024 and sell it today you would lose (620.00) from holding Luckin Coffee or give up 21.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luckin Coffee vs. GIYANI GOLD
Performance |
| Timeline |
| Luckin Coffee |
| GIYANI GOLD |
Luckin Coffee and GIYANI GOLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luckin Coffee and GIYANI GOLD
The main advantage of trading using opposite Luckin Coffee and GIYANI GOLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, GIYANI GOLD 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 GIYANI GOLD will offset losses from the drop in GIYANI GOLD's long position.| Luckin Coffee vs. Datang International Power | Luckin Coffee vs. Molson Coors Beverage | Luckin Coffee vs. Fevertree Drinks PLC | Luckin Coffee vs. DICKER DATA LTD |
| GIYANI GOLD vs. Apple Inc | GIYANI GOLD vs. Apple Inc | GIYANI GOLD vs. Apple Inc | GIYANI GOLD 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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