Correlation Between Qingdao Foods and Liaoning Dingjide
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By analyzing existing cross correlation between Qingdao Foods Co and Liaoning Dingjide Petrochemical, you can compare the effects of market volatilities on Qingdao Foods and Liaoning Dingjide 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 Qingdao Foods with a short position of Liaoning Dingjide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingdao Foods and Liaoning Dingjide.
Diversification Opportunities for Qingdao Foods and Liaoning Dingjide
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Qingdao and Liaoning is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Qingdao Foods Co and Liaoning Dingjide Petrochemica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Dingjide and Qingdao Foods 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 Qingdao Foods Co are associated (or correlated) with Liaoning Dingjide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Dingjide has no effect on the direction of Qingdao Foods i.e., Qingdao Foods and Liaoning Dingjide go up and down completely randomly.
Pair Corralation between Qingdao Foods and Liaoning Dingjide
Assuming the 90 days trading horizon Qingdao Foods Co is expected to generate 0.44 times more return on investment than Liaoning Dingjide. However, Qingdao Foods Co is 2.27 times less risky than Liaoning Dingjide. It trades about -0.13 of its potential returns per unit of risk. Liaoning Dingjide Petrochemical is currently generating about -0.14 per unit of risk. If you would invest 1,387 in Qingdao Foods Co on November 3, 2024 and sell it today you would lose (62.00) from holding Qingdao Foods Co or give up 4.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qingdao Foods Co vs. Liaoning Dingjide Petrochemica
Performance |
| Timeline |
| Qingdao Foods |
| Liaoning Dingjide |
Qingdao Foods and Liaoning Dingjide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qingdao Foods and Liaoning Dingjide
The main advantage of trading using opposite Qingdao Foods and Liaoning Dingjide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qingdao Foods position performs unexpectedly, Liaoning Dingjide 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 Liaoning Dingjide will offset losses from the drop in Liaoning Dingjide's long position.| Qingdao Foods vs. China Longyuan Power | Qingdao Foods vs. PetroChina Co Ltd | Qingdao Foods vs. Guangxi Guiguan Electric | Qingdao Foods vs. Yantai North Andre |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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