Correlation Between Xinjiang Communications and Ligao Foods
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By analyzing existing cross correlation between Xinjiang Communications Construction and Ligao Foods CoLtd, you can compare the effects of market volatilities on Xinjiang Communications 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 Xinjiang Communications with a short position of Ligao Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Communications and Ligao Foods.
Diversification Opportunities for Xinjiang Communications and Ligao Foods
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xinjiang and Ligao is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Communications Constr 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 Xinjiang Communications 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 Xinjiang Communications Construction 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 Xinjiang Communications i.e., Xinjiang Communications and Ligao Foods go up and down completely randomly.
Pair Corralation between Xinjiang Communications and Ligao Foods
Assuming the 90 days trading horizon Xinjiang Communications Construction is expected to generate 0.79 times more return on investment than Ligao Foods. However, Xinjiang Communications Construction is 1.26 times less risky than Ligao Foods. It trades about 0.18 of its potential returns per unit of risk. Ligao Foods CoLtd is currently generating about 0.11 per unit of risk. If you would invest 1,159 in Xinjiang Communications Construction on September 4, 2024 and sell it today you would earn a total of 126.00 from holding Xinjiang Communications Construction or generate 10.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Communications Constr vs. Ligao Foods CoLtd
Performance |
| Timeline |
| Xinjiang Communications |
| Ligao Foods CoLtd |
Xinjiang Communications and Ligao Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Communications and Ligao Foods
The main advantage of trading using opposite Xinjiang Communications and Ligao Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Communications 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.| Xinjiang Communications vs. China Life Insurance | Xinjiang Communications vs. Cinda Securities Co | Xinjiang Communications vs. Piotech Inc A | Xinjiang Communications vs. Dongxing Sec Co |
| Ligao Foods vs. Poly Real Estate | Ligao Foods vs. China Vanke Co | Ligao Foods vs. China Merchants Shekou | Ligao Foods vs. Huafa Industrial 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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