Correlation Between Panda Dairy and Ligao Foods
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By analyzing existing cross correlation between Panda Dairy Corp and Ligao Foods CoLtd, you can compare the effects of market volatilities on Panda Dairy 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 Panda Dairy with a short position of Ligao Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panda Dairy and Ligao Foods.
Diversification Opportunities for Panda Dairy and Ligao Foods
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Panda and Ligao is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Panda Dairy Corp 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 Panda Dairy 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 Panda Dairy Corp 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 Panda Dairy i.e., Panda Dairy and Ligao Foods go up and down completely randomly.
Pair Corralation between Panda Dairy and Ligao Foods
Assuming the 90 days trading horizon Panda Dairy Corp is expected to generate 0.98 times more return on investment than Ligao Foods. However, Panda Dairy Corp is 1.02 times less risky than Ligao Foods. It trades about 0.0 of its potential returns per unit of risk. Ligao Foods CoLtd is currently generating about -0.14 per unit of risk. If you would invest 2,110 in Panda Dairy Corp on August 26, 2024 and sell it today you would lose (12.00) from holding Panda Dairy Corp or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Panda Dairy Corp vs. Ligao Foods CoLtd
Performance |
| Timeline |
| Panda Dairy Corp |
| Ligao Foods CoLtd |
Panda Dairy and Ligao Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panda Dairy and Ligao Foods
The main advantage of trading using opposite Panda Dairy and Ligao Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panda Dairy 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.| Panda Dairy vs. China Petroleum Chemical | Panda Dairy vs. PetroChina Co Ltd | Panda Dairy vs. China State Construction | Panda Dairy vs. China Railway Group |
| Ligao Foods vs. China Petroleum Chemical | Ligao Foods vs. PetroChina Co Ltd | Ligao Foods vs. China State Construction | Ligao Foods vs. China Railway Group |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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