Correlation Between Luckin Coffee and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and NTG Nordic 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 NTG Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luckin Coffee and NTG Nordic Transport, you can compare the effects of market volatilities on Luckin Coffee and NTG Nordic 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 NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and NTG Nordic.
Diversification Opportunities for Luckin Coffee and NTG Nordic
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Luckin and NTG is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and NTG Nordic Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTG Nordic Transport 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 NTG Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTG Nordic Transport has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and NTG Nordic go up and down completely randomly.
Pair Corralation between Luckin Coffee and NTG Nordic
Assuming the 90 days trading horizon Luckin Coffee is expected to generate 2.15 times more return on investment than NTG Nordic. However, Luckin Coffee is 2.15 times more volatile than NTG Nordic Transport. It trades about 0.19 of its potential returns per unit of risk. NTG Nordic Transport is currently generating about -0.37 per unit of risk. If you would invest 2,240 in Luckin Coffee on October 24, 2024 and sell it today you would earn a total of 260.00 from holding Luckin Coffee or generate 11.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luckin Coffee vs. NTG Nordic Transport
Performance |
| Timeline |
| Luckin Coffee |
| NTG Nordic Transport |
Luckin Coffee and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luckin Coffee and NTG Nordic
The main advantage of trading using opposite Luckin Coffee and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, NTG Nordic 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 NTG Nordic will offset losses from the drop in NTG Nordic's long position.| Luckin Coffee vs. Zoom Video Communications | Luckin Coffee vs. Citic Telecom International | Luckin Coffee vs. ELMOS SEMICONDUCTOR | Luckin Coffee vs. TOREX SEMICONDUCTOR LTD |
| NTG Nordic vs. Transport International Holdings | NTG Nordic vs. BII Railway Transportation | NTG Nordic vs. Columbia Sportswear | NTG Nordic vs. American Eagle Outfitters |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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