Correlation Between Luckin Coffee and Vivendi SE
Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and Vivendi SE 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 Vivendi SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luckin Coffee and Vivendi SE, you can compare the effects of market volatilities on Luckin Coffee and Vivendi SE 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 Vivendi SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and Vivendi SE.
Diversification Opportunities for Luckin Coffee and Vivendi SE
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Luckin and Vivendi is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and Vivendi SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivendi SE 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 Vivendi SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivendi SE has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and Vivendi SE go up and down completely randomly.
Pair Corralation between Luckin Coffee and Vivendi SE
Assuming the 90 days trading horizon Luckin Coffee is expected to generate 2.38 times more return on investment than Vivendi SE. However, Luckin Coffee is 2.38 times more volatile than Vivendi SE. It trades about -0.01 of its potential returns per unit of risk. Vivendi SE is currently generating about -0.29 per unit of risk. If you would invest 2,260 in Luckin Coffee on September 15, 2024 and sell it today you would lose (60.00) from holding Luckin Coffee or give up 2.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luckin Coffee vs. Vivendi SE
Performance |
| Timeline |
| Luckin Coffee |
| Vivendi SE |
Luckin Coffee and Vivendi SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luckin Coffee and Vivendi SE
The main advantage of trading using opposite Luckin Coffee and Vivendi SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, Vivendi SE 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 Vivendi SE will offset losses from the drop in Vivendi SE's long position.| Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc |
| Vivendi SE vs. News Corporation | Vivendi SE vs. Prosiebensat 1 Media | Vivendi SE vs. Superior Plus Corp | Vivendi SE vs. NMI Holdings |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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