Correlation Between Luckin Coffee and Hyster Yale

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Can any of the company-specific risk be diversified away by investing in both Luckin Coffee and Hyster Yale 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 Hyster Yale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luckin Coffee and Hyster Yale Materials Handling, you can compare the effects of market volatilities on Luckin Coffee and Hyster Yale 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 Hyster Yale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luckin Coffee and Hyster Yale.

Diversification Opportunities for Luckin Coffee and Hyster Yale

0.16
  Correlation Coefficient

Average diversification

The 3 months correlation between Luckin and Hyster is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Luckin Coffee and Hyster Yale Materials Handling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyster Yale Materials 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 Hyster Yale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyster Yale Materials has no effect on the direction of Luckin Coffee i.e., Luckin Coffee and Hyster Yale go up and down completely randomly.

Pair Corralation between Luckin Coffee and Hyster Yale

Assuming the 90 days trading horizon Luckin Coffee is expected to generate 1.97 times less return on investment than Hyster Yale. In addition to that, Luckin Coffee is 1.32 times more volatile than Hyster Yale Materials Handling. It trades about 0.03 of its total potential returns per unit of risk. Hyster Yale Materials Handling is currently generating about 0.07 per unit of volatility. If you would invest  2,153  in Hyster Yale Materials Handling on September 19, 2024 and sell it today you would earn a total of  2,997  from holding Hyster Yale Materials Handling or generate 139.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Luckin Coffee  vs.  Hyster Yale Materials Handling

 Performance 
       Timeline  
Luckin Coffee 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Luckin Coffee are ranked lower than 8 (%) 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.
Hyster Yale Materials 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Hyster Yale Materials Handling has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Hyster Yale is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Luckin Coffee and Hyster Yale Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Luckin Coffee and Hyster Yale

The main advantage of trading using opposite Luckin Coffee and Hyster Yale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luckin Coffee position performs unexpectedly, Hyster Yale 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 Hyster Yale will offset losses from the drop in Hyster Yale's long position.
The idea behind Luckin Coffee and Hyster Yale Materials Handling 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.
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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