Correlation Between Luckin Coffee and FORMPIPE SOFTWARE

Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and FORMPIPE SOFTWARE 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 Luckin Coffee and FORMPIPE SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Luckin Coffee and FORMPIPE SOFTWARE AB, you can compare the effects of market volatilities on Luckin Coffee and FORMPIPE SOFTWARE 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 Luckin Coffee with a short position of FORMPIPE SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and FORMPIPE SOFTWARE.

Diversification Opportunities for Luckin Coffee and FORMPIPE SOFTWARE

-0.04

Correlation Coefficient

Luckin Coffee  FORMPIPE SOFTWARE

Good diversification

The 3 months correlation between Luckin and FORMPIPE is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and FORMPIPE SOFTWARE AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORMPIPE SOFTWARE and Luckin Coffee 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 Luckin Coffee are associated (or correlated) with FORMPIPE SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORMPIPE SOFTWARE has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and FORMPIPE SOFTWARE go up and down completely randomly.

Pair Corralation between Luckin Coffee and FORMPIPE SOFTWARE

Assuming the 90 days trading horizon Luckin Coffee is expected to generate 2.29 times less return on investment than FORMPIPE SOFTWARE. In addition to that, Luckin Coffee is 1.47 times more volatile than FORMPIPE SOFTWARE AB. It trades about 0.03 of its total potential returns per unit of risk. FORMPIPE SOFTWARE AB is currently generating about 0.09 per unit of volatility. If you would invest  183.00  in FORMPIPE SOFTWARE AB on September 25, 2024 and sell it today you would earn a total of  18.00  from holding FORMPIPE SOFTWARE AB or generate 9.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Luckin Coffee  vs.  FORMPIPE SOFTWARE AB

Luckin Coffee

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Luckin Coffee are ranked lower than 6 (%) 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.

FORMPIPE SOFTWARE

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FORMPIPE SOFTWARE AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, FORMPIPE SOFTWARE is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Luckin Coffee and FORMPIPE SOFTWARE

The main advantage of trading using opposite Luckin Coffee and FORMPIPE SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE will offset losses from the drop in FORMPIPE SOFTWARE's long position.

The idea behind Luckin Coffee and FORMPIPE SOFTWARE AB 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.