Correlation Between Ligao Foods and Maoming Petro
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By analyzing existing cross correlation between Ligao Foods CoLtd and Maoming Petro Chemical Shihua, you can compare the effects of market volatilities on Ligao Foods and Maoming Petro 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 Maoming Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligao Foods and Maoming Petro.
Diversification Opportunities for Ligao Foods and Maoming Petro
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ligao and Maoming is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ligao Foods CoLtd and Maoming Petro Chemical Shihua in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maoming Petro Chemical 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 Maoming Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maoming Petro Chemical has no effect on the direction of Ligao Foods i.e., Ligao Foods and Maoming Petro go up and down completely randomly.
Pair Corralation between Ligao Foods and Maoming Petro
Assuming the 90 days trading horizon Ligao Foods CoLtd is expected to generate 1.41 times more return on investment than Maoming Petro. However, Ligao Foods is 1.41 times more volatile than Maoming Petro Chemical Shihua. It trades about 0.05 of its potential returns per unit of risk. Maoming Petro Chemical Shihua is currently generating about 0.04 per unit of risk. If you would invest 2,926 in Ligao Foods CoLtd on October 12, 2024 and sell it today you would earn a total of 662.00 from holding Ligao Foods CoLtd or generate 22.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ligao Foods CoLtd vs. Maoming Petro Chemical Shihua
Performance |
| Timeline |
| Ligao Foods CoLtd |
| Maoming Petro Chemical |
Ligao Foods and Maoming Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligao Foods and Maoming Petro
The main advantage of trading using opposite Ligao Foods and Maoming Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligao Foods position performs unexpectedly, Maoming Petro 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 Maoming Petro will offset losses from the drop in Maoming Petro's long position.| Ligao Foods vs. Tianshui Huatian Technology | Ligao Foods vs. Guangdong Transtek Medical | Ligao Foods vs. Holitech Technology Co | Ligao Foods vs. Linewell Software Co |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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