Correlation Between Luckin Coffee and MINCO SILVER
Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and MINCO SILVER 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 MINCO SILVER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luckin Coffee and MINCO SILVER, you can compare the effects of market volatilities on Luckin Coffee and MINCO SILVER 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 MINCO SILVER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and MINCO SILVER.
Diversification Opportunities for Luckin Coffee and MINCO SILVER
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Luckin and MINCO is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and MINCO SILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MINCO SILVER 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 MINCO SILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MINCO SILVER has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and MINCO SILVER go up and down completely randomly.
Pair Corralation between Luckin Coffee and MINCO SILVER
Assuming the 90 days trading horizon Luckin Coffee is expected to under-perform the MINCO SILVER. In addition to that, Luckin Coffee is 1.09 times more volatile than MINCO SILVER. It trades about -0.04 of its total potential returns per unit of risk. MINCO SILVER is currently generating about 0.1 per unit of volatility. If you would invest 12.00 in MINCO SILVER on August 24, 2024 and sell it today you would earn a total of 1.00 from holding MINCO SILVER or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Luckin Coffee vs. MINCO SILVER
Performance |
| Timeline |
| Luckin Coffee |
| MINCO SILVER |
Luckin Coffee and MINCO SILVER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luckin Coffee and MINCO SILVER
The main advantage of trading using opposite Luckin Coffee and MINCO SILVER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, MINCO SILVER 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 MINCO SILVER will offset losses from the drop in MINCO SILVER's long position.| Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc |
| MINCO SILVER vs. Apple Inc | MINCO SILVER vs. Apple Inc | MINCO SILVER vs. Apple Inc | MINCO SILVER vs. Apple Inc |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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