Correlation Between Ligao Foods and China Petroleum
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By analyzing existing cross correlation between Ligao Foods CoLtd and China Petroleum Chemical, you can compare the effects of market volatilities on Ligao Foods and China Petroleum 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 China Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligao Foods and China Petroleum.
Diversification Opportunities for Ligao Foods and China Petroleum
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ligao and China is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ligao Foods CoLtd and China Petroleum Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Petroleum Chemical 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 China Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Petroleum Chemical has no effect on the direction of Ligao Foods i.e., Ligao Foods and China Petroleum go up and down completely randomly.
Pair Corralation between Ligao Foods and China Petroleum
Assuming the 90 days trading horizon Ligao Foods CoLtd is expected to under-perform the China Petroleum. In addition to that, Ligao Foods is 2.0 times more volatile than China Petroleum Chemical. It trades about -0.04 of its total potential returns per unit of risk. China Petroleum Chemical is currently generating about 0.01 per unit of volatility. If you would invest 646.00 in China Petroleum Chemical on August 31, 2024 and sell it today you would lose (10.00) from holding China Petroleum Chemical or give up 1.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ligao Foods CoLtd vs. China Petroleum Chemical
Performance |
| Timeline |
| Ligao Foods CoLtd |
| China Petroleum Chemical |
Ligao Foods and China Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligao Foods and China Petroleum
The main advantage of trading using opposite Ligao Foods and China Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligao Foods position performs unexpectedly, China Petroleum 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 China Petroleum will offset losses from the drop in China Petroleum'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 |
| China Petroleum vs. Lootom Telcovideo Network | China Petroleum vs. Miracll Chemicals Co | China Petroleum vs. Henan Shuanghui Investment | China Petroleum vs. Do Fluoride Chemicals 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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