Correlation Between Luckin Coffee and MOLSON COORS
Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and MOLSON COORS 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 MOLSON COORS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luckin Coffee and MOLSON RS BEVERAGE, you can compare the effects of market volatilities on Luckin Coffee and MOLSON COORS 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 MOLSON COORS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and MOLSON COORS.
Diversification Opportunities for Luckin Coffee and MOLSON COORS
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Luckin and MOLSON is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and MOLSON RS BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOLSON RS BEVERAGE 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 MOLSON COORS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOLSON RS BEVERAGE has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and MOLSON COORS go up and down completely randomly.
Pair Corralation between Luckin Coffee and MOLSON COORS
Assuming the 90 days trading horizon Luckin Coffee is expected to generate 1.64 times more return on investment than MOLSON COORS. However, Luckin Coffee is 1.64 times more volatile than MOLSON RS BEVERAGE. It trades about 0.02 of its potential returns per unit of risk. MOLSON RS BEVERAGE is currently generating about 0.02 per unit of risk. If you would invest 1,970 in Luckin Coffee on September 3, 2024 and sell it today you would earn a total of 50.00 from holding Luckin Coffee or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luckin Coffee vs. MOLSON RS BEVERAGE
Performance |
| Timeline |
| Luckin Coffee |
| MOLSON RS BEVERAGE |
Luckin Coffee and MOLSON COORS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luckin Coffee and MOLSON COORS
The main advantage of trading using opposite Luckin Coffee and MOLSON COORS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, MOLSON COORS 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 MOLSON COORS will offset losses from the drop in MOLSON COORS's long position.| Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc |
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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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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