Correlation Between Ligao Foods and Guilin Seamild
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By analyzing existing cross correlation between Ligao Foods CoLtd and Guilin Seamild Foods, you can compare the effects of market volatilities on Ligao Foods and Guilin Seamild 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 Guilin Seamild. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligao Foods and Guilin Seamild.
Diversification Opportunities for Ligao Foods and Guilin Seamild
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ligao and Guilin is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Ligao Foods CoLtd and Guilin Seamild Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guilin Seamild 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 Guilin Seamild. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guilin Seamild Foods has no effect on the direction of Ligao Foods i.e., Ligao Foods and Guilin Seamild go up and down completely randomly.
Pair Corralation between Ligao Foods and Guilin Seamild
Assuming the 90 days trading horizon Ligao Foods is expected to generate 1.35 times less return on investment than Guilin Seamild. In addition to that, Ligao Foods is 1.61 times more volatile than Guilin Seamild Foods. It trades about 0.1 of its total potential returns per unit of risk. Guilin Seamild Foods is currently generating about 0.21 per unit of volatility. If you would invest 1,324 in Guilin Seamild Foods on September 3, 2024 and sell it today you would earn a total of 132.00 from holding Guilin Seamild Foods or generate 9.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ligao Foods CoLtd vs. Guilin Seamild Foods
Performance |
| Timeline |
| Ligao Foods CoLtd |
| Guilin Seamild Foods |
Ligao Foods and Guilin Seamild Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligao Foods and Guilin Seamild
The main advantage of trading using opposite Ligao Foods and Guilin Seamild positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligao Foods position performs unexpectedly, Guilin Seamild 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 Guilin Seamild will offset losses from the drop in Guilin Seamild'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 |
| Guilin Seamild vs. Beijing Wantai Biological | Guilin Seamild vs. Aluminum Corp of | Guilin Seamild vs. COL Digital Publishing | Guilin Seamild 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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