Correlation Between Luckin Coffee and Ming Le
Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and Ming Le 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 Ming Le into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luckin Coffee and Ming Le Sports, you can compare the effects of market volatilities on Luckin Coffee and Ming Le 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 Ming Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and Ming Le.
Diversification Opportunities for Luckin Coffee and Ming Le
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Luckin and Ming is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and Ming Le Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ming Le Sports 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 Ming Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ming Le Sports has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and Ming Le go up and down completely randomly.
Pair Corralation between Luckin Coffee and Ming Le
Assuming the 90 days trading horizon Luckin Coffee is expected to under-perform the Ming Le. In addition to that, Luckin Coffee is 1.49 times more volatile than Ming Le Sports. It trades about 0.0 of its total potential returns per unit of risk. Ming Le Sports is currently generating about 0.02 per unit of volatility. If you would invest 129.00 in Ming Le Sports on September 14, 2024 and sell it today you would earn a total of 12.00 from holding Ming Le Sports or generate 9.3% 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. Ming Le Sports
Performance |
| Timeline |
| Luckin Coffee |
| Ming Le Sports |
Luckin Coffee and Ming Le Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luckin Coffee and Ming Le
The main advantage of trading using opposite Luckin Coffee and Ming Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, Ming Le 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 Ming Le will offset losses from the drop in Ming Le'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 |
| Ming Le vs. SBA Communications Corp | Ming Le vs. INTERSHOP Communications Aktiengesellschaft | Ming Le vs. Verizon Communications | Ming Le vs. Consolidated Communications Holdings |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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