Correlation Between Luckin Coffee and Fidelity National
Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and Fidelity National 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 Fidelity National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luckin Coffee and Fidelity National Information, you can compare the effects of market volatilities on Luckin Coffee and Fidelity National 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 Fidelity National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and Fidelity National.
Diversification Opportunities for Luckin Coffee and Fidelity National
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Luckin and Fidelity is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National 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 Fidelity National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity National has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and Fidelity National go up and down completely randomly.
Pair Corralation between Luckin Coffee and Fidelity National
Assuming the 90 days trading horizon Luckin Coffee is expected to generate 2.45 times more return on investment than Fidelity National. However, Luckin Coffee is 2.45 times more volatile than Fidelity National Information. It trades about 0.02 of its potential returns per unit of risk. Fidelity National Information is currently generating about 0.04 per unit of risk. If you would invest 2,071 in Luckin Coffee on September 3, 2024 and sell it today you would lose (51.00) from holding Luckin Coffee or give up 2.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luckin Coffee vs. Fidelity National Information
Performance |
| Timeline |
| Luckin Coffee |
| Fidelity National |
Luckin Coffee and Fidelity National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luckin Coffee and Fidelity National
The main advantage of trading using opposite Luckin Coffee and Fidelity National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, Fidelity National 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 Fidelity National will offset losses from the drop in Fidelity National's long position.| Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc |
| Fidelity National vs. VIAPLAY GROUP AB | Fidelity National vs. ePlay Digital | Fidelity National vs. COLUMBIA SPORTSWEAR | Fidelity National vs. Playtech plc |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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