Correlation Between Vastned Retail and Luckin Coffee
Can any of the company-specific risk be diversified away by investing in both Vastned Retail 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 Vastned Retail and Luckin Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vastned Retail NV and Luckin Coffee, you can compare the effects of market volatilities on Vastned Retail 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 Vastned Retail with a short position of Luckin Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vastned Retail and Luckin Coffee.
Diversification Opportunities for Vastned Retail and Luckin Coffee
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vastned and Luckin is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail NV and Luckin Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luckin Coffee and Vastned Retail 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 Vastned Retail NV 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 Vastned Retail i.e., Vastned Retail and Luckin Coffee go up and down completely randomly.
Pair Corralation between Vastned Retail and Luckin Coffee
Assuming the 90 days horizon Vastned Retail NV is expected to under-perform the Luckin Coffee. But the stock apears to be less risky and, when comparing its historical volatility, Vastned Retail NV is 4.72 times less risky than Luckin Coffee. The stock trades about -0.11 of its potential returns per unit of risk. The Luckin Coffee is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,140 in Luckin Coffee on September 13, 2024 and sell it today you would earn a total of 160.00 from holding Luckin Coffee or generate 7.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vastned Retail NV vs. Luckin Coffee
Performance |
| Timeline |
| Vastned Retail NV |
| Luckin Coffee |
Vastned Retail and Luckin Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vastned Retail and Luckin Coffee
The main advantage of trading using opposite Vastned Retail and Luckin Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vastned Retail 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.| Vastned Retail vs. Guidewire Software | Vastned Retail vs. Evolution Mining Limited | Vastned Retail vs. TAL Education Group | Vastned Retail vs. MAGIC SOFTWARE ENTR |
| Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc | Luckin Coffee vs. Apple Inc |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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