Correlation Between Ligao Foods and Panda Dairy
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By analyzing existing cross correlation between Ligao Foods CoLtd and Panda Dairy Corp, you can compare the effects of market volatilities on Ligao Foods and Panda Dairy 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 Panda Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligao Foods and Panda Dairy.
Diversification Opportunities for Ligao Foods and Panda Dairy
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ligao and Panda is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Ligao Foods CoLtd and Panda Dairy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panda Dairy Corp 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 Panda Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panda Dairy Corp has no effect on the direction of Ligao Foods i.e., Ligao Foods and Panda Dairy go up and down completely randomly.
Pair Corralation between Ligao Foods and Panda Dairy
Assuming the 90 days trading horizon Ligao Foods CoLtd is expected to under-perform the Panda Dairy. But the stock apears to be less risky and, when comparing its historical volatility, Ligao Foods CoLtd is 1.11 times less risky than Panda Dairy. The stock trades about -0.05 of its potential returns per unit of risk. The Panda Dairy Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,347 in Panda Dairy Corp on August 30, 2024 and sell it today you would lose (111.00) from holding Panda Dairy Corp or give up 4.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ligao Foods CoLtd vs. Panda Dairy Corp
Performance |
| Timeline |
| Ligao Foods CoLtd |
| Panda Dairy Corp |
Ligao Foods and Panda Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligao Foods and Panda Dairy
The main advantage of trading using opposite Ligao Foods and Panda Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligao Foods position performs unexpectedly, Panda Dairy 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 Panda Dairy will offset losses from the drop in Panda Dairy's long position.| Ligao Foods vs. Heren Health Co | Ligao Foods vs. Lotus Health Group | Ligao Foods vs. Bank of Suzhou | Ligao Foods vs. Jiangsu Financial Leasing |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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