Correlation Between Luckin Coffee and Veolia Environnement
Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and Veolia Environnement 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 Veolia Environnement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luckin Coffee and Veolia Environnement SA, you can compare the effects of market volatilities on Luckin Coffee and Veolia Environnement 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 Veolia Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and Veolia Environnement.
Diversification Opportunities for Luckin Coffee and Veolia Environnement
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Luckin and Veolia is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and Veolia Environnement SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veolia Environnement 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 Veolia Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veolia Environnement has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and Veolia Environnement go up and down completely randomly.
Pair Corralation between Luckin Coffee and Veolia Environnement
Assuming the 90 days trading horizon Luckin Coffee is expected to generate 2.87 times more return on investment than Veolia Environnement. However, Luckin Coffee is 2.87 times more volatile than Veolia Environnement SA. It trades about 0.02 of its potential returns per unit of risk. Veolia Environnement SA is currently generating about 0.02 per unit of risk. If you would invest 2,650 in Luckin Coffee on November 1, 2024 and sell it today you would lose (30.00) from holding Luckin Coffee or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Luckin Coffee vs. Veolia Environnement SA
Performance |
| Timeline |
| Luckin Coffee |
| Veolia Environnement |
Luckin Coffee and Veolia Environnement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luckin Coffee and Veolia Environnement
The main advantage of trading using opposite Luckin Coffee and Veolia Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, Veolia Environnement 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 Veolia Environnement will offset losses from the drop in Veolia Environnement's long position.| Luckin Coffee vs. Harmony Gold Mining | Luckin Coffee vs. US Physical Therapy | Luckin Coffee vs. MPH Health Care | Luckin Coffee vs. Jacquet Metal Service |
| Veolia Environnement vs. Perdoceo Education | Veolia Environnement vs. COMBA TELECOM SYST | Veolia Environnement vs. Singapore Telecommunications Limited | Veolia Environnement vs. UNITED UTILITIES GR |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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