Correlation Between Ligao Foods and China Vanke
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By analyzing existing cross correlation between Ligao Foods CoLtd and China Vanke Co, you can compare the effects of market volatilities on Ligao Foods and China Vanke 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 Ligao Foods with a short position of China Vanke. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligao Foods and China Vanke.
Diversification Opportunities for Ligao Foods and China Vanke
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ligao and China is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Ligao Foods CoLtd and China Vanke Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Vanke and Ligao 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 Ligao Foods CoLtd are associated (or correlated) with China Vanke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Vanke has no effect on the direction of Ligao Foods i.e., Ligao Foods and China Vanke go up and down completely randomly.
Pair Corralation between Ligao Foods and China Vanke
Assuming the 90 days trading horizon Ligao Foods CoLtd is expected to generate 1.25 times more return on investment than China Vanke. However, Ligao Foods is 1.25 times more volatile than China Vanke Co. It trades about -0.04 of its potential returns per unit of risk. China Vanke Co is currently generating about -0.05 per unit of risk. If you would invest 8,653 in Ligao Foods CoLtd on September 12, 2024 and sell it today you would lose (4,500) from holding Ligao Foods CoLtd or give up 52.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ligao Foods CoLtd vs. China Vanke Co
Performance |
| Timeline |
| Ligao Foods CoLtd |
| China Vanke |
Ligao Foods and China Vanke Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligao Foods and China Vanke
The main advantage of trading using opposite Ligao Foods and China Vanke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligao Foods position performs unexpectedly, China Vanke 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 China Vanke will offset losses from the drop in China Vanke's long position.| Ligao Foods vs. China Petroleum Chemical | Ligao Foods vs. PetroChina Co Ltd | Ligao Foods vs. China State Construction | Ligao Foods vs. China Railway Group |
| China Vanke vs. Sichuan Jinshi Technology | China Vanke vs. Xinjiang Communications Construction | China Vanke vs. Linewell Software Co | China Vanke vs. Tianjin Hi Tech Development |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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