Correlation Between Luckin Coffee and SOLSTAD OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luckin Coffee and SOLSTAD OFFSHORE NK, you can compare the effects of market volatilities on Luckin Coffee and SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and SOLSTAD OFFSHORE.
Diversification Opportunities for Luckin Coffee and SOLSTAD OFFSHORE
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Luckin and SOLSTAD is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and SOLSTAD OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOLSTAD OFFSHORE has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and SOLSTAD OFFSHORE go up and down completely randomly.
Pair Corralation between Luckin Coffee and SOLSTAD OFFSHORE
Assuming the 90 days trading horizon Luckin Coffee is expected to generate 1.27 times more return on investment than SOLSTAD OFFSHORE. However, Luckin Coffee is 1.27 times more volatile than SOLSTAD OFFSHORE NK. It trades about 0.06 of its potential returns per unit of risk. SOLSTAD OFFSHORE NK is currently generating about 0.02 per unit of risk. If you would invest 1,690 in Luckin Coffee on September 3, 2024 and sell it today you would earn a total of 350.00 from holding Luckin Coffee or generate 20.71% 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. SOLSTAD OFFSHORE NK
Performance |
| Timeline |
| Luckin Coffee |
| SOLSTAD OFFSHORE |
Luckin Coffee and SOLSTAD OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luckin Coffee and SOLSTAD OFFSHORE
The main advantage of trading using opposite Luckin Coffee and SOLSTAD OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE will offset losses from the drop in SOLSTAD OFFSHORE's long position.| Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc |
| SOLSTAD OFFSHORE vs. Auto Trader Group | SOLSTAD OFFSHORE vs. Tradeweb Markets | SOLSTAD OFFSHORE vs. Vastned Retail NV | SOLSTAD OFFSHORE vs. Canon Marketing Japan |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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