Correlation Between Shaanxi Meineng and Ligao Foods
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By analyzing existing cross correlation between Shaanxi Meineng Clean and Ligao Foods CoLtd, you can compare the effects of market volatilities on Shaanxi Meineng 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 Shaanxi Meineng with a short position of Ligao Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Meineng and Ligao Foods.
Diversification Opportunities for Shaanxi Meineng and Ligao Foods
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shaanxi and Ligao is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Meineng Clean 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 Shaanxi Meineng 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 Shaanxi Meineng Clean 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 Shaanxi Meineng i.e., Shaanxi Meineng and Ligao Foods go up and down completely randomly.
Pair Corralation between Shaanxi Meineng and Ligao Foods
Assuming the 90 days trading horizon Shaanxi Meineng is expected to generate 1.34 times less return on investment than Ligao Foods. But when comparing it to its historical volatility, Shaanxi Meineng Clean is 1.48 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 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,658 in Ligao Foods CoLtd on September 3, 2024 and sell it today you would earn a total of 286.00 from holding Ligao Foods CoLtd or generate 7.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaanxi Meineng Clean vs. Ligao Foods CoLtd
Performance |
| Timeline |
| Shaanxi Meineng Clean |
| Ligao Foods CoLtd |
Shaanxi Meineng and Ligao Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Meineng and Ligao Foods
The main advantage of trading using opposite Shaanxi Meineng and Ligao Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Meineng 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.| Shaanxi Meineng vs. Industrial and Commercial | Shaanxi Meineng vs. Agricultural Bank of | Shaanxi Meineng vs. China Construction Bank | Shaanxi Meineng vs. Bank of China |
| Ligao Foods vs. Beijing Wantai Biological | Ligao Foods vs. Aluminum Corp of | Ligao Foods vs. COL Digital Publishing | Ligao Foods vs. Shaanxi Meineng Clean |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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