Correlation Between SentinelOne and Luckin Coffee
Can any of the company-specific risk be diversified away by investing in both SentinelOne 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 SentinelOne and Luckin Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SentinelOne and Luckin Coffee, you can compare the effects of market volatilities on SentinelOne 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 SentinelOne with a short position of Luckin Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of SentinelOne and Luckin Coffee.
Diversification Opportunities for SentinelOne and Luckin Coffee
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SentinelOne and Luckin is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and Luckin Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luckin Coffee and SentinelOne 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 SentinelOne 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 SentinelOne i.e., SentinelOne and Luckin Coffee go up and down completely randomly.
Pair Corralation between SentinelOne and Luckin Coffee
Taking into account the 90-day investment horizon SentinelOne is expected to generate 0.64 times more return on investment than Luckin Coffee. However, SentinelOne is 1.56 times less risky than Luckin Coffee. It trades about 0.15 of its potential returns per unit of risk. Luckin Coffee is currently generating about 0.04 per unit of risk. If you would invest 1,722 in SentinelOne on August 31, 2024 and sell it today you would earn a total of 1,073 from holding SentinelOne or generate 62.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.45% |
| Values | Daily Returns |
SentinelOne vs. Luckin Coffee
Performance |
| Timeline |
| SentinelOne |
| Luckin Coffee |
SentinelOne and Luckin Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SentinelOne and Luckin Coffee
The main advantage of trading using opposite SentinelOne and Luckin Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne 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.| SentinelOne vs. Crowdstrike Holdings | SentinelOne vs. Okta Inc | SentinelOne vs. Cloudflare | SentinelOne vs. MongoDB |
| Luckin Coffee vs. Avanos Medical | Luckin Coffee vs. Japan Medical Dynamic | Luckin Coffee vs. Jacquet Metal Service | Luckin Coffee vs. EIDESVIK OFFSHORE NK |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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