Correlation Between Ligao Foods and Guangdong Silvere
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By analyzing existing cross correlation between Ligao Foods CoLtd and Guangdong Silvere Sci, you can compare the effects of market volatilities on Ligao Foods and Guangdong Silvere 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 Guangdong Silvere. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligao Foods and Guangdong Silvere.
Diversification Opportunities for Ligao Foods and Guangdong Silvere
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ligao and Guangdong is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Ligao Foods CoLtd and Guangdong Silvere Sci in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Silvere Sci 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 Guangdong Silvere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Silvere Sci has no effect on the direction of Ligao Foods i.e., Ligao Foods and Guangdong Silvere go up and down completely randomly.
Pair Corralation between Ligao Foods and Guangdong Silvere
Assuming the 90 days trading horizon Ligao Foods CoLtd is expected to generate 1.03 times more return on investment than Guangdong Silvere. However, Ligao Foods is 1.03 times more volatile than Guangdong Silvere Sci. It trades about 0.18 of its potential returns per unit of risk. Guangdong Silvere Sci is currently generating about 0.17 per unit of risk. If you would invest 2,291 in Ligao Foods CoLtd on August 28, 2024 and sell it today you would earn a total of 1,147 from holding Ligao Foods CoLtd or generate 50.07% 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. Guangdong Silvere Sci
Performance |
| Timeline |
| Ligao Foods CoLtd |
| Guangdong Silvere Sci |
Ligao Foods and Guangdong Silvere Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligao Foods and Guangdong Silvere
The main advantage of trading using opposite Ligao Foods and Guangdong Silvere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligao Foods position performs unexpectedly, Guangdong Silvere 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 Guangdong Silvere will offset losses from the drop in Guangdong Silvere's long position.| Ligao Foods vs. China Petroleum Chemical | Ligao Foods vs. PetroChina Co Ltd | Ligao Foods vs. China State Construction | Ligao Foods vs. China Railway Group |
| Guangdong Silvere vs. Zijin Mining Group | Guangdong Silvere vs. Wanhua Chemical Group | Guangdong Silvere vs. Baoshan Iron Steel | Guangdong Silvere vs. Shandong Gold Mining |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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