Correlation Between Luckin Coffee and USS
Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and USS 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 USS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luckin Coffee and USS Co, you can compare the effects of market volatilities on Luckin Coffee and USS 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 USS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and USS.
Diversification Opportunities for Luckin Coffee and USS
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Luckin and USS is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and USS Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USS Co 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 USS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USS Co has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and USS go up and down completely randomly.
Pair Corralation between Luckin Coffee and USS
Assuming the 90 days trading horizon Luckin Coffee is expected to under-perform the USS. In addition to that, Luckin Coffee is 3.63 times more volatile than USS Co. It trades about -0.02 of its total potential returns per unit of risk. USS Co is currently generating about 0.5 per unit of volatility. If you would invest 775.00 in USS Co on September 5, 2024 and sell it today you would earn a total of 100.00 from holding USS Co or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luckin Coffee vs. USS Co
Performance |
| Timeline |
| Luckin Coffee |
| USS Co |
Luckin Coffee and USS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luckin Coffee and USS
The main advantage of trading using opposite Luckin Coffee and USS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, USS 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 USS will offset losses from the drop in USS's long position.| Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc |
| USS vs. Park Hotels Resorts | USS vs. Luckin Coffee | USS vs. NH HOTEL GROUP | USS vs. Summit Hotel Properties |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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