Correlation Between Ligao Foods and Ningbo Tech
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By analyzing existing cross correlation between Ligao Foods CoLtd and Ningbo Tech Bank Co, you can compare the effects of market volatilities on Ligao Foods and Ningbo Tech 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 Ningbo Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligao Foods and Ningbo Tech.
Diversification Opportunities for Ligao Foods and Ningbo Tech
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ligao and Ningbo is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Ligao Foods CoLtd and Ningbo Tech Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Tech Bank 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 Ningbo Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Tech Bank has no effect on the direction of Ligao Foods i.e., Ligao Foods and Ningbo Tech go up and down completely randomly.
Pair Corralation between Ligao Foods and Ningbo Tech
Assuming the 90 days trading horizon Ligao Foods CoLtd is expected to under-perform the Ningbo Tech. In addition to that, Ligao Foods is 1.17 times more volatile than Ningbo Tech Bank Co. It trades about -0.05 of its total potential returns per unit of risk. Ningbo Tech Bank Co is currently generating about -0.04 per unit of volatility. If you would invest 646.00 in Ningbo Tech Bank Co on September 3, 2024 and sell it today you would lose (318.00) from holding Ningbo Tech Bank Co or give up 49.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ligao Foods CoLtd vs. Ningbo Tech Bank Co
Performance |
| Timeline |
| Ligao Foods CoLtd |
| Ningbo Tech Bank |
Ligao Foods and Ningbo Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligao Foods and Ningbo Tech
The main advantage of trading using opposite Ligao Foods and Ningbo Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligao Foods position performs unexpectedly, Ningbo Tech 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 Ningbo Tech will offset losses from the drop in Ningbo Tech's long position.| Ligao Foods vs. Beijing Wantai Biological | Ligao Foods vs. Aluminum Corp of | Ligao Foods vs. COL Digital Publishing | Ligao Foods vs. Shaanxi Meineng Clean |
| Ningbo Tech vs. Beijing Wantai Biological | Ningbo Tech vs. Aluminum Corp of | Ningbo Tech vs. COL Digital Publishing | Ningbo Tech vs. Shaanxi Meineng Clean |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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