Correlation Between Ligao Foods and Puyang Huicheng
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By analyzing existing cross correlation between Ligao Foods CoLtd and Puyang Huicheng Electronic, you can compare the effects of market volatilities on Ligao Foods and Puyang Huicheng 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 Puyang Huicheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligao Foods and Puyang Huicheng.
Diversification Opportunities for Ligao Foods and Puyang Huicheng
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ligao and Puyang is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Ligao Foods CoLtd and Puyang Huicheng Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puyang Huicheng Elec 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 Puyang Huicheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puyang Huicheng Elec has no effect on the direction of Ligao Foods i.e., Ligao Foods and Puyang Huicheng go up and down completely randomly.
Pair Corralation between Ligao Foods and Puyang Huicheng
Assuming the 90 days trading horizon Ligao Foods CoLtd is expected to generate 1.13 times more return on investment than Puyang Huicheng. However, Ligao Foods is 1.13 times more volatile than Puyang Huicheng Electronic. It trades about 0.2 of its potential returns per unit of risk. Puyang Huicheng Electronic is currently generating about 0.14 per unit of risk. If you would invest 2,331 in Ligao Foods CoLtd on August 31, 2024 and sell it today you would earn a total of 1,255 from holding Ligao Foods CoLtd or generate 53.84% 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. Puyang Huicheng Electronic
Performance |
| Timeline |
| Ligao Foods CoLtd |
| Puyang Huicheng Elec |
Ligao Foods and Puyang Huicheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligao Foods and Puyang Huicheng
The main advantage of trading using opposite Ligao Foods and Puyang Huicheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligao Foods position performs unexpectedly, Puyang Huicheng 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 Puyang Huicheng will offset losses from the drop in Puyang Huicheng's long position.| Ligao Foods vs. Lutian Machinery Co | Ligao Foods vs. PetroChina Co Ltd | Ligao Foods vs. Bank of China | Ligao Foods vs. Gansu Jiu Steel |
| Puyang Huicheng vs. Zijin Mining Group | Puyang Huicheng vs. Wanhua Chemical Group | Puyang Huicheng vs. Baoshan Iron Steel | Puyang Huicheng vs. Rongsheng Petrochemical Co |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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