Correlation Between Luckin Coffee and Ramaco Resources
Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and Ramaco Resources 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 Ramaco Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luckin Coffee and Ramaco Resources, you can compare the effects of market volatilities on Luckin Coffee and Ramaco Resources 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 Ramaco Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and Ramaco Resources.
Diversification Opportunities for Luckin Coffee and Ramaco Resources
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Luckin and Ramaco is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and Ramaco Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramaco Resources 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 Ramaco Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramaco Resources has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and Ramaco Resources go up and down completely randomly.
Pair Corralation between Luckin Coffee and Ramaco Resources
If you would invest 1,016 in Ramaco Resources on September 5, 2024 and sell it today you would earn a total of 250.00 from holding Ramaco Resources or generate 24.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Luckin Coffee vs. Ramaco Resources
Performance |
| Timeline |
| Luckin Coffee |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ramaco Resources |
Luckin Coffee and Ramaco Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luckin Coffee and Ramaco Resources
The main advantage of trading using opposite Luckin Coffee and Ramaco Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, Ramaco Resources 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 Ramaco Resources will offset losses from the drop in Ramaco Resources' long position.| Luckin Coffee vs. Shake Shack | Luckin Coffee vs. Dominos Pizza | Luckin Coffee vs. Papa Johns International | Luckin Coffee vs. Chipotle Mexican Grill |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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