Correlation Between Ligao Foods and City Development
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By analyzing existing cross correlation between Ligao Foods CoLtd and City Development Environment, you can compare the effects of market volatilities on Ligao Foods and City Development 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 City Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligao Foods and City Development.
Diversification Opportunities for Ligao Foods and City Development
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ligao and City is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Ligao Foods CoLtd and City Development Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Development Env 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 City Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Development Env has no effect on the direction of Ligao Foods i.e., Ligao Foods and City Development go up and down completely randomly.
Pair Corralation between Ligao Foods and City Development
Assuming the 90 days trading horizon Ligao Foods CoLtd is expected to under-perform the City Development. In addition to that, Ligao Foods is 1.53 times more volatile than City Development Environment. It trades about -0.01 of its total potential returns per unit of risk. City Development Environment is currently generating about 0.06 per unit of volatility. If you would invest 1,065 in City Development Environment on September 4, 2024 and sell it today you would earn a total of 305.00 from holding City Development Environment or generate 28.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ligao Foods CoLtd vs. City Development Environment
Performance |
| Timeline |
| Ligao Foods CoLtd |
| City Development Env |
Ligao Foods and City Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligao Foods and City Development
The main advantage of trading using opposite Ligao Foods and City Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligao Foods position performs unexpectedly, City Development 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 City Development will offset losses from the drop in City Development's long position.| Ligao Foods vs. Poly Real Estate | Ligao Foods vs. China Vanke Co | Ligao Foods vs. China Merchants Shekou | Ligao Foods vs. Huafa Industrial Co |
| City Development vs. Harbin Hatou Investment | City Development vs. Sinomach Automobile Co | City Development vs. Guangzhou Automobile Group | City Development vs. Shenzhen Centralcon Investment |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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