Correlation Between Ligao Foods and HaiXin Foods
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By analyzing existing cross correlation between Ligao Foods CoLtd and HaiXin Foods Co, you can compare the effects of market volatilities on Ligao Foods and HaiXin Foods 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 HaiXin Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligao Foods and HaiXin Foods.
Diversification Opportunities for Ligao Foods and HaiXin Foods
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ligao and HaiXin is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Ligao Foods CoLtd and HaiXin Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HaiXin Foods 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 HaiXin Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HaiXin Foods has no effect on the direction of Ligao Foods i.e., Ligao Foods and HaiXin Foods go up and down completely randomly.
Pair Corralation between Ligao Foods and HaiXin Foods
Assuming the 90 days trading horizon Ligao Foods CoLtd is expected to under-perform the HaiXin Foods. But the stock apears to be less risky and, when comparing its historical volatility, Ligao Foods CoLtd is 1.29 times less risky than HaiXin Foods. The stock trades about -0.09 of its potential returns per unit of risk. The HaiXin Foods Co is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 363.00 in HaiXin Foods Co on August 25, 2024 and sell it today you would earn a total of 40.00 from holding HaiXin Foods Co or generate 11.02% 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. HaiXin Foods Co
Performance |
Timeline |
Ligao Foods CoLtd |
HaiXin Foods |
Ligao Foods and HaiXin Foods Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ligao Foods and HaiXin Foods
The main advantage of trading using opposite Ligao Foods and HaiXin Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligao Foods position performs unexpectedly, HaiXin Foods 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 HaiXin Foods will offset losses from the drop in HaiXin Foods' long position.Ligao Foods vs. Sichuan Jinshi Technology | Ligao Foods vs. Fiberhome Telecommunication Technologies | Ligao Foods vs. Western Superconducting Tech | Ligao Foods vs. Jiangxi Hengda Hi Tech |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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