Correlation Between Luckin Coffee and MTI WIRELESS
Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and MTI WIRELESS 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 MTI WIRELESS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luckin Coffee and MTI WIRELESS EDGE, you can compare the effects of market volatilities on Luckin Coffee and MTI WIRELESS 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 MTI WIRELESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and MTI WIRELESS.
Diversification Opportunities for Luckin Coffee and MTI WIRELESS
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Luckin and MTI is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and MTI WIRELESS EDGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTI WIRELESS EDGE 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 MTI WIRELESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTI WIRELESS EDGE has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and MTI WIRELESS go up and down completely randomly.
Pair Corralation between Luckin Coffee and MTI WIRELESS
Assuming the 90 days trading horizon Luckin Coffee is expected to under-perform the MTI WIRELESS. In addition to that, Luckin Coffee is 1.61 times more volatile than MTI WIRELESS EDGE. It trades about -0.21 of its total potential returns per unit of risk. MTI WIRELESS EDGE is currently generating about -0.17 per unit of volatility. If you would invest 50.00 in MTI WIRELESS EDGE on September 1, 2024 and sell it today you would lose (5.00) from holding MTI WIRELESS EDGE or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luckin Coffee vs. MTI WIRELESS EDGE
Performance |
| Timeline |
| Luckin Coffee |
| MTI WIRELESS EDGE |
Luckin Coffee and MTI WIRELESS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luckin Coffee and MTI WIRELESS
The main advantage of trading using opposite Luckin Coffee and MTI WIRELESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, MTI WIRELESS 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 MTI WIRELESS will offset losses from the drop in MTI WIRELESS's long position.| Luckin Coffee vs. United Natural Foods | Luckin Coffee vs. TreeHouse Foods | Luckin Coffee vs. WILLIS LEASE FIN | Luckin Coffee vs. Sixt Leasing SE |
| MTI WIRELESS vs. MGIC INVESTMENT | MTI WIRELESS vs. PennantPark Investment | MTI WIRELESS vs. SEI INVESTMENTS | MTI WIRELESS vs. PennyMac 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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