Correlation Between Luckin Coffee and Vastned Retail
Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and Vastned Retail 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 Vastned Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luckin Coffee and Vastned Retail NV, you can compare the effects of market volatilities on Luckin Coffee and Vastned Retail 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 Vastned Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and Vastned Retail.
Diversification Opportunities for Luckin Coffee and Vastned Retail
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Luckin and Vastned is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and Vastned Retail NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vastned Retail NV 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 Vastned Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vastned Retail NV has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and Vastned Retail go up and down completely randomly.
Pair Corralation between Luckin Coffee and Vastned Retail
Assuming the 90 days trading horizon Luckin Coffee is expected to generate 5.14 times more return on investment than Vastned Retail. However, Luckin Coffee is 5.14 times more volatile than Vastned Retail NV. It trades about 0.02 of its potential returns per unit of risk. Vastned Retail NV is currently generating about -0.09 per unit of risk. If you would invest 2,320 in Luckin Coffee on September 13, 2024 and sell it today you would lose (20.00) from holding Luckin Coffee or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luckin Coffee vs. Vastned Retail NV
Performance |
| Timeline |
| Luckin Coffee |
| Vastned Retail NV |
Luckin Coffee and Vastned Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luckin Coffee and Vastned Retail
The main advantage of trading using opposite Luckin Coffee and Vastned Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, Vastned Retail 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 Vastned Retail will offset losses from the drop in Vastned Retail's long position.| Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc |
| Vastned Retail vs. Guidewire Software | Vastned Retail vs. Evolution Mining Limited | Vastned Retail vs. TAL Education Group | Vastned Retail vs. MAGIC SOFTWARE ENTR |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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