Correlation Between QINGCI GAMES and Luckin Coffee
Can any of the company-specific risk be diversified away by investing in both QINGCI GAMES 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 QINGCI GAMES and Luckin Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QINGCI GAMES INC and Luckin Coffee, you can compare the effects of market volatilities on QINGCI GAMES 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 QINGCI GAMES with a short position of Luckin Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of QINGCI GAMES and Luckin Coffee.
Diversification Opportunities for QINGCI GAMES and Luckin Coffee
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between QINGCI and Luckin is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding QINGCI GAMES INC and Luckin Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luckin Coffee and QINGCI GAMES 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 QINGCI GAMES INC 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 QINGCI GAMES i.e., QINGCI GAMES and Luckin Coffee go up and down completely randomly.
Pair Corralation between QINGCI GAMES and Luckin Coffee
Assuming the 90 days horizon QINGCI GAMES INC is expected to generate 0.65 times more return on investment than Luckin Coffee. However, QINGCI GAMES INC is 1.53 times less risky than Luckin Coffee. It trades about 0.37 of its potential returns per unit of risk. Luckin Coffee is currently generating about 0.11 per unit of risk. If you would invest 30.00 in QINGCI GAMES INC on October 15, 2024 and sell it today you would earn a total of 5.00 from holding QINGCI GAMES INC or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
QINGCI GAMES INC vs. Luckin Coffee
Performance |
| Timeline |
| QINGCI GAMES INC |
| Luckin Coffee |
QINGCI GAMES and Luckin Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QINGCI GAMES and Luckin Coffee
The main advantage of trading using opposite QINGCI GAMES and Luckin Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QINGCI GAMES 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.| QINGCI GAMES vs. The Yokohama Rubber | QINGCI GAMES vs. Mitsubishi Materials | QINGCI GAMES vs. Materialise NV | QINGCI GAMES vs. WESANA HEALTH HOLD |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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