Correlation Between Molson Coors and Luckin Coffee
Can any of the company-specific risk be diversified away by investing in both Molson Coors 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 Molson Coors and Luckin Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Molson Coors Beverage and Luckin Coffee, you can compare the effects of market volatilities on Molson Coors 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 Molson Coors with a short position of Luckin Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Luckin Coffee.
Diversification Opportunities for Molson Coors and Luckin Coffee
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Molson and Luckin is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Beverage and Luckin Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luckin Coffee and Molson Coors 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 Molson Coors Beverage 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 Molson Coors i.e., Molson Coors and Luckin Coffee go up and down completely randomly.
Pair Corralation between Molson Coors and Luckin Coffee
Assuming the 90 days trading horizon Molson Coors is expected to generate 1.63 times less return on investment than Luckin Coffee. But when comparing it to its historical volatility, Molson Coors Beverage is 2.79 times less risky than Luckin Coffee. It trades about 0.04 of its potential returns per unit of risk. Luckin Coffee is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,600 in Luckin Coffee on December 4, 2024 and sell it today you would earn a total of 220.00 from holding Luckin Coffee or generate 8.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molson Coors Beverage vs. Luckin Coffee
Performance |
| Timeline |
| Molson Coors Beverage |
| Luckin Coffee |
Molson Coors and Luckin Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molson Coors and Luckin Coffee
The main advantage of trading using opposite Molson Coors and Luckin Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors 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.| Molson Coors vs. ANTA Sports Products | Molson Coors vs. Siemens Healthineers AG | Molson Coors vs. Aristocrat Leisure Limited | Molson Coors vs. USWE SPORTS AB |
| Luckin Coffee vs. Suntory Beverage Food | Luckin Coffee vs. Molson Coors Beverage | Luckin Coffee vs. ScanSource | Luckin Coffee vs. MOLSON RS BEVERAGE |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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