Correlation Between Luckin Coffee and Shyft
Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and Shyft 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 Shyft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luckin Coffee and The Shyft Group, you can compare the effects of market volatilities on Luckin Coffee and Shyft 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 Shyft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and Shyft.
Diversification Opportunities for Luckin Coffee and Shyft
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Luckin and Shyft is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and The Shyft Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shyft Group 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 Shyft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shyft Group has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and Shyft go up and down completely randomly.
Pair Corralation between Luckin Coffee and Shyft
Assuming the 90 days trading horizon Luckin Coffee is expected to under-perform the Shyft. In addition to that, Luckin Coffee is 1.08 times more volatile than The Shyft Group. It trades about -0.21 of its total potential returns per unit of risk. The Shyft Group is currently generating about 0.19 per unit of volatility. If you would invest 1,146 in The Shyft Group on September 1, 2024 and sell it today you would earn a total of 184.00 from holding The Shyft Group or generate 16.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Luckin Coffee vs. The Shyft Group
Performance |
| Timeline |
| Luckin Coffee |
| Shyft Group |
Luckin Coffee and Shyft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luckin Coffee and Shyft
The main advantage of trading using opposite Luckin Coffee and Shyft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, Shyft 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 Shyft will offset losses from the drop in Shyft'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 |
| Shyft vs. Superior Plus Corp | Shyft vs. NMI Holdings | Shyft vs. Origin Agritech | Shyft vs. SIVERS SEMICONDUCTORS AB |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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