Correlation Between Luckin Coffee and Rayonier Advanced
Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and Rayonier Advanced 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 Rayonier Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luckin Coffee and Rayonier Advanced Materials, you can compare the effects of market volatilities on Luckin Coffee and Rayonier Advanced 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 Rayonier Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and Rayonier Advanced.
Diversification Opportunities for Luckin Coffee and Rayonier Advanced
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Luckin and Rayonier is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and Rayonier Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rayonier Advanced 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 Rayonier Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rayonier Advanced has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and Rayonier Advanced go up and down completely randomly.
Pair Corralation between Luckin Coffee and Rayonier Advanced
Assuming the 90 days trading horizon Luckin Coffee is expected to generate 1.04 times more return on investment than Rayonier Advanced. However, Luckin Coffee is 1.04 times more volatile than Rayonier Advanced Materials. It trades about 0.03 of its potential returns per unit of risk. Rayonier Advanced Materials is currently generating about 0.0 per unit of risk. If you would invest 2,460 in Luckin Coffee on October 10, 2024 and sell it today you would earn a total of 20.00 from holding Luckin Coffee or generate 0.81% 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. Rayonier Advanced Materials
Performance |
| Timeline |
| Luckin Coffee |
| Rayonier Advanced |
Luckin Coffee and Rayonier Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luckin Coffee and Rayonier Advanced
The main advantage of trading using opposite Luckin Coffee and Rayonier Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, Rayonier Advanced 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 Rayonier Advanced will offset losses from the drop in Rayonier Advanced's long position.| Luckin Coffee vs. EIDESVIK OFFSHORE NK | Luckin Coffee vs. MTY Food Group | Luckin Coffee vs. SENECA FOODS A | Luckin Coffee vs. TYSON FOODS A |
| Rayonier Advanced vs. Corporate Office Properties | Rayonier Advanced vs. ARDAGH METAL PACDL 0001 | Rayonier Advanced vs. Nishi Nippon Railroad Co | Rayonier Advanced vs. TEXAS ROADHOUSE |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |