Correlation Between VARIOUS EATERIES and Luckin Coffee

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both VARIOUS EATERIES 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 VARIOUS EATERIES and Luckin Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VARIOUS EATERIES LS and Luckin Coffee, you can compare the effects of market volatilities on VARIOUS EATERIES 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 VARIOUS EATERIES with a short position of Luckin Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of VARIOUS EATERIES and Luckin Coffee.

Diversification Opportunities for VARIOUS EATERIES and Luckin Coffee

VARIOUSLuckinDiversified AwayVARIOUSLuckinDiversified Away100%
-0.2
  Correlation Coefficient

Good diversification

The 3 months correlation between VARIOUS and Luckin is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding VARIOUS EATERIES LS and Luckin Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luckin Coffee and VARIOUS EATERIES 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 VARIOUS EATERIES LS 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 VARIOUS EATERIES i.e., VARIOUS EATERIES and Luckin Coffee go up and down completely randomly.

Pair Corralation between VARIOUS EATERIES and Luckin Coffee

Assuming the 90 days horizon VARIOUS EATERIES LS is expected to under-perform the Luckin Coffee. But the stock apears to be less risky and, when comparing its historical volatility, VARIOUS EATERIES LS is 2.99 times less risky than Luckin Coffee. The stock trades about -0.1 of its potential returns per unit of risk. The Luckin Coffee is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,870  in Luckin Coffee on September 24, 2024 and sell it today you would earn a total of  310.00  from holding Luckin Coffee or generate 16.58% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

VARIOUS EATERIES LS  vs.  Luckin Coffee

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 010203040
JavaScript chart by amCharts 3.21.1563U LC0A
       Timeline  
VARIOUS EATERIES 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days VARIOUS EATERIES LS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec0.190.1950.20.2050.21
Luckin Coffee 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Luckin Coffee are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Luckin Coffee unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec2122232425

VARIOUS EATERIES and Luckin Coffee Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.48-1.89-1.29-0.69-0.09280.471.051.632.212.79 0.050.100.15
JavaScript chart by amCharts 3.21.1563U LC0A
       Returns  

Pair Trading with VARIOUS EATERIES and Luckin Coffee

The main advantage of trading using opposite VARIOUS EATERIES and Luckin Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VARIOUS EATERIES 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.
The idea behind VARIOUS EATERIES LS and Luckin Coffee pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

Other Complementary Tools

Share Portfolio
Track or share privately all of your investments from the convenience of any device
Equity Valuation
Check real value of public entities based on technical and fundamental data
Transaction History
View history of all your transactions and understand their impact on performance
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.