Correlation Between Ningxia Younglight and Ligao Foods
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By analyzing existing cross correlation between Ningxia Younglight Chemicals and Ligao Foods CoLtd, you can compare the effects of market volatilities on Ningxia Younglight and Ligao Foods 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 Ningxia Younglight with a short position of Ligao Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningxia Younglight and Ligao Foods.
Diversification Opportunities for Ningxia Younglight and Ligao Foods
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ningxia and Ligao is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Ningxia Younglight Chemicals and Ligao Foods CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ligao Foods CoLtd and Ningxia Younglight 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 Ningxia Younglight Chemicals are associated (or correlated) with Ligao Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ligao Foods CoLtd has no effect on the direction of Ningxia Younglight i.e., Ningxia Younglight and Ligao Foods go up and down completely randomly.
Pair Corralation between Ningxia Younglight and Ligao Foods
Assuming the 90 days trading horizon Ningxia Younglight is expected to generate 1.55 times less return on investment than Ligao Foods. But when comparing it to its historical volatility, Ningxia Younglight Chemicals is 1.17 times less risky than Ligao Foods. It trades about 0.04 of its potential returns per unit of risk. Ligao Foods CoLtd is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,926 in Ligao Foods CoLtd on October 12, 2024 and sell it today you would earn a total of 662.00 from holding Ligao Foods CoLtd or generate 22.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningxia Younglight Chemicals vs. Ligao Foods CoLtd
Performance |
| Timeline |
| Ningxia Younglight |
| Ligao Foods CoLtd |
Ningxia Younglight and Ligao Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningxia Younglight and Ligao Foods
The main advantage of trading using opposite Ningxia Younglight and Ligao Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningxia Younglight position performs unexpectedly, Ligao Foods 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 Ligao Foods will offset losses from the drop in Ligao Foods' long position.| Ningxia Younglight vs. Zoje Resources Investment | Ningxia Younglight vs. Shanghai Material Trading | Ningxia Younglight vs. Vanfund Urban Investment | Ningxia Younglight vs. Postal Savings Bank |
| Ligao Foods vs. Tianshui Huatian Technology | Ligao Foods vs. Guangdong Transtek Medical | Ligao Foods vs. Holitech Technology Co | Ligao Foods vs. Linewell Software Co |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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