Correlation Between Ligao Foods and Shenzhen Changfang
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By analyzing existing cross correlation between Ligao Foods CoLtd and Shenzhen Changfang Light, you can compare the effects of market volatilities on Ligao Foods and Shenzhen Changfang 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 Shenzhen Changfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligao Foods and Shenzhen Changfang.
Diversification Opportunities for Ligao Foods and Shenzhen Changfang
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ligao and Shenzhen is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ligao Foods CoLtd and Shenzhen Changfang Light in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Changfang Light 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 Shenzhen Changfang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Changfang Light has no effect on the direction of Ligao Foods i.e., Ligao Foods and Shenzhen Changfang go up and down completely randomly.
Pair Corralation between Ligao Foods and Shenzhen Changfang
Assuming the 90 days trading horizon Ligao Foods CoLtd is expected to under-perform the Shenzhen Changfang. In addition to that, Ligao Foods is 1.09 times more volatile than Shenzhen Changfang Light. It trades about -0.04 of its total potential returns per unit of risk. Shenzhen Changfang Light is currently generating about 0.14 per unit of volatility. If you would invest 171.00 in Shenzhen Changfang Light on October 28, 2024 and sell it today you would earn a total of 13.00 from holding Shenzhen Changfang Light or generate 7.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ligao Foods CoLtd vs. Shenzhen Changfang Light
Performance |
| Timeline |
| Ligao Foods CoLtd |
| Shenzhen Changfang Light |
Ligao Foods and Shenzhen Changfang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligao Foods and Shenzhen Changfang
The main advantage of trading using opposite Ligao Foods and Shenzhen Changfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligao Foods position performs unexpectedly, Shenzhen Changfang 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 Shenzhen Changfang will offset losses from the drop in Shenzhen Changfang's long position.| Ligao Foods vs. Kweichow Moutai Co | Ligao Foods vs. Contemporary Amperex Technology | Ligao Foods vs. G bits Network Technology | Ligao Foods vs. Beijing Roborock Technology |
| Shenzhen Changfang vs. Dazhong Transportation Group | Shenzhen Changfang vs. Keda Clean Energy | Shenzhen Changfang vs. Ningbo Kangqiang Electronics | Shenzhen Changfang vs. LianChuang Electronic Technology |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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