Correlation Between Maple Leaf and Luckin Coffee
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and Luckin Coffee 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 Maple Leaf and Luckin Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maple Leaf Foods and Luckin Coffee, you can compare the effects of market volatilities on Maple Leaf and Luckin Coffee 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 Maple Leaf with a short position of Luckin Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and Luckin Coffee.
Diversification Opportunities for Maple Leaf and Luckin Coffee
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Maple and Luckin is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods and Luckin Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luckin Coffee and Maple Leaf 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 Maple Leaf Foods are associated (or correlated) with Luckin Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luckin Coffee has no effect on the direction of Maple Leaf i.e., Maple Leaf and Luckin Coffee go up and down completely randomly.
Pair Corralation between Maple Leaf and Luckin Coffee
Assuming the 90 days trading horizon Maple Leaf Foods is expected to generate 0.95 times more return on investment than Luckin Coffee. However, Maple Leaf Foods is 1.05 times less risky than Luckin Coffee. It trades about 0.16 of its potential returns per unit of risk. Luckin Coffee is currently generating about 0.12 per unit of risk. If you would invest 1,360 in Maple Leaf Foods on November 7, 2024 and sell it today you would earn a total of 90.00 from holding Maple Leaf Foods or generate 6.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Maple Leaf Foods vs. Luckin Coffee
Performance |
| Timeline |
| Maple Leaf Foods |
| Luckin Coffee |
Maple Leaf and Luckin Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and Luckin Coffee
The main advantage of trading using opposite Maple Leaf and Luckin Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, Luckin Coffee 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 Luckin Coffee will offset losses from the drop in Luckin Coffee's long position.| Maple Leaf vs. China Communications Services | Maple Leaf vs. Zoom Video Communications | Maple Leaf vs. Spirent Communications plc | Maple Leaf vs. Austevoll Seafood ASA |
| Luckin Coffee vs. Acadia Healthcare | Luckin Coffee vs. Merit Medical Systems | Luckin Coffee vs. Advanced Medical Solutions | Luckin Coffee vs. MEDICAL FACILITIES NEW |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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