Correlation Between Ligao Foods and Sichuan Fulin
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By analyzing existing cross correlation between Ligao Foods CoLtd and Sichuan Fulin Transportation, you can compare the effects of market volatilities on Ligao Foods and Sichuan Fulin 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 Sichuan Fulin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligao Foods and Sichuan Fulin.
Diversification Opportunities for Ligao Foods and Sichuan Fulin
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ligao and Sichuan is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ligao Foods CoLtd and Sichuan Fulin Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Fulin Transp 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 Sichuan Fulin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Fulin Transp has no effect on the direction of Ligao Foods i.e., Ligao Foods and Sichuan Fulin go up and down completely randomly.
Pair Corralation between Ligao Foods and Sichuan Fulin
Assuming the 90 days trading horizon Ligao Foods CoLtd is expected to under-perform the Sichuan Fulin. In addition to that, Ligao Foods is 1.16 times more volatile than Sichuan Fulin Transportation. It trades about -0.04 of its total potential returns per unit of risk. Sichuan Fulin Transportation is currently generating about 0.02 per unit of volatility. If you would invest 663.00 in Sichuan Fulin Transportation on October 27, 2024 and sell it today you would earn a total of 54.00 from holding Sichuan Fulin Transportation or generate 8.14% 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. Sichuan Fulin Transportation
Performance |
| Timeline |
| Ligao Foods CoLtd |
| Sichuan Fulin Transp |
Ligao Foods and Sichuan Fulin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligao Foods and Sichuan Fulin
The main advantage of trading using opposite Ligao Foods and Sichuan Fulin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligao Foods position performs unexpectedly, Sichuan Fulin 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 Sichuan Fulin will offset losses from the drop in Sichuan Fulin's long position.| Ligao Foods vs. Hubeiyichang Transportation Group | Ligao Foods vs. Sinomach Automobile Co | Ligao Foods vs. Zotye Automobile Co | Ligao Foods vs. Dongfeng Automobile Co |
| Sichuan Fulin vs. China Mobile Limited | Sichuan Fulin vs. Agricultural Bank of | Sichuan Fulin vs. Industrial and Commercial | Sichuan Fulin vs. China Construction Bank |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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