Correlation Between MTI WIRELESS and Luckin Coffee
Can any of the company-specific risk be diversified away by investing in both MTI WIRELESS 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 MTI WIRELESS and Luckin Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MTI WIRELESS EDGE and Luckin Coffee, you can compare the effects of market volatilities on MTI WIRELESS 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 MTI WIRELESS with a short position of Luckin Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTI WIRELESS and Luckin Coffee.
Diversification Opportunities for MTI WIRELESS and Luckin Coffee
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between MTI and Luckin is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding MTI WIRELESS EDGE and Luckin Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luckin Coffee and MTI WIRELESS 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 MTI WIRELESS EDGE 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 MTI WIRELESS i.e., MTI WIRELESS and Luckin Coffee go up and down completely randomly.
Pair Corralation between MTI WIRELESS and Luckin Coffee
Assuming the 90 days horizon MTI WIRELESS EDGE is expected to generate 0.62 times more return on investment than Luckin Coffee. However, MTI WIRELESS EDGE is 1.61 times less risky than Luckin Coffee. It trades about -0.17 of its potential returns per unit of risk. Luckin Coffee is currently generating about -0.21 per unit of risk. If you would invest 50.00 in MTI WIRELESS EDGE on September 1, 2024 and sell it today you would lose (5.00) from holding MTI WIRELESS EDGE or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MTI WIRELESS EDGE vs. Luckin Coffee
Performance |
| Timeline |
| MTI WIRELESS EDGE |
| Luckin Coffee |
MTI WIRELESS and Luckin Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MTI WIRELESS and Luckin Coffee
The main advantage of trading using opposite MTI WIRELESS and Luckin Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTI WIRELESS 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.| MTI WIRELESS vs. MGIC INVESTMENT | MTI WIRELESS vs. PennantPark Investment | MTI WIRELESS vs. SEI INVESTMENTS | MTI WIRELESS vs. PennyMac Mortgage Investment |
| Luckin Coffee vs. United Natural Foods | Luckin Coffee vs. TreeHouse Foods | Luckin Coffee vs. WILLIS LEASE FIN | Luckin Coffee vs. Sixt Leasing SE |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |