Correlation Between Ligao Foods and Qingdao Citymedia
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By analyzing existing cross correlation between Ligao Foods CoLtd and Qingdao Citymedia Co, you can compare the effects of market volatilities on Ligao Foods and Qingdao Citymedia 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 Qingdao Citymedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligao Foods and Qingdao Citymedia.
Diversification Opportunities for Ligao Foods and Qingdao Citymedia
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ligao and Qingdao is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ligao Foods CoLtd and Qingdao Citymedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingdao Citymedia 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 Qingdao Citymedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingdao Citymedia has no effect on the direction of Ligao Foods i.e., Ligao Foods and Qingdao Citymedia go up and down completely randomly.
Pair Corralation between Ligao Foods and Qingdao Citymedia
Assuming the 90 days trading horizon Ligao Foods CoLtd is expected to generate 1.77 times more return on investment than Qingdao Citymedia. However, Ligao Foods is 1.77 times more volatile than Qingdao Citymedia Co. It trades about 0.23 of its potential returns per unit of risk. Qingdao Citymedia Co is currently generating about 0.17 per unit of risk. If you would invest 2,482 in Ligao Foods CoLtd on September 12, 2024 and sell it today you would earn a total of 1,788 from holding Ligao Foods CoLtd or generate 72.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.28% |
| Values | Daily Returns |
Ligao Foods CoLtd vs. Qingdao Citymedia Co
Performance |
| Timeline |
| Ligao Foods CoLtd |
| Qingdao Citymedia |
Ligao Foods and Qingdao Citymedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligao Foods and Qingdao Citymedia
The main advantage of trading using opposite Ligao Foods and Qingdao Citymedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligao Foods position performs unexpectedly, Qingdao Citymedia 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 Qingdao Citymedia will offset losses from the drop in Qingdao Citymedia's long position.| Ligao Foods vs. Nanjing Putian Telecommunications | Ligao Foods vs. Tianjin Realty Development | Ligao Foods vs. Kangyue Technology Co | Ligao Foods vs. Shenzhen Hifuture Electric |
| Qingdao Citymedia vs. Ming Yang Smart | Qingdao Citymedia vs. 159681 | Qingdao Citymedia vs. 159005 | Qingdao Citymedia vs. Loctek Ergonomic 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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