Correlation Between 159005 and Ligao Foods
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By analyzing existing cross correlation between 159005 and Ligao Foods CoLtd, you can compare the effects of market volatilities on 159005 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 159005 with a short position of Ligao Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of 159005 and Ligao Foods.
Diversification Opportunities for 159005 and Ligao Foods
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 159005 and Ligao is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding 159005 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 159005 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 159005 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 159005 i.e., 159005 and Ligao Foods go up and down completely randomly.
Pair Corralation between 159005 and Ligao Foods
Assuming the 90 days trading horizon 159005 is expected to generate 122.35 times less return on investment than Ligao Foods. But when comparing it to its historical volatility, 159005 is 173.53 times less risky than Ligao Foods. It trades about 0.21 of its potential returns per unit of risk. Ligao Foods CoLtd is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,585 in Ligao Foods CoLtd on September 28, 2024 and sell it today you would earn a total of 481.00 from holding Ligao Foods CoLtd or generate 13.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
159005 vs. Ligao Foods CoLtd
Performance |
| Timeline |
| 159005 |
| Ligao Foods CoLtd |
159005 and Ligao Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 159005 and Ligao Foods
The main advantage of trading using opposite 159005 and Ligao Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 159005 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.The idea behind 159005 and Ligao Foods CoLtd 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.| Ligao Foods vs. Ming Yang Smart | Ligao Foods vs. 159681 | Ligao Foods vs. 159005 | Ligao Foods vs. Loctek Ergonomic Technology |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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