Correlation Between Ligao Foods and Tonghua Grape
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By analyzing existing cross correlation between Ligao Foods CoLtd and Tonghua Grape Wine, you can compare the effects of market volatilities on Ligao Foods and Tonghua Grape 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 Tonghua Grape. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligao Foods and Tonghua Grape.
Diversification Opportunities for Ligao Foods and Tonghua Grape
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ligao and Tonghua is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ligao Foods CoLtd and Tonghua Grape Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tonghua Grape Wine 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 Tonghua Grape. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tonghua Grape Wine has no effect on the direction of Ligao Foods i.e., Ligao Foods and Tonghua Grape go up and down completely randomly.
Pair Corralation between Ligao Foods and Tonghua Grape
Assuming the 90 days trading horizon Ligao Foods CoLtd is expected to under-perform the Tonghua Grape. In addition to that, Ligao Foods is 1.24 times more volatile than Tonghua Grape Wine. It trades about -0.03 of its total potential returns per unit of risk. Tonghua Grape Wine is currently generating about 0.0 per unit of volatility. If you would invest 328.00 in Tonghua Grape Wine on September 4, 2024 and sell it today you would lose (24.00) from holding Tonghua Grape Wine or give up 7.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ligao Foods CoLtd vs. Tonghua Grape Wine
Performance |
| Timeline |
| Ligao Foods CoLtd |
| Tonghua Grape Wine |
Ligao Foods and Tonghua Grape Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligao Foods and Tonghua Grape
The main advantage of trading using opposite Ligao Foods and Tonghua Grape positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligao Foods position performs unexpectedly, Tonghua Grape 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 Tonghua Grape will offset losses from the drop in Tonghua Grape's long position.| Ligao Foods vs. Poly Real Estate | Ligao Foods vs. China Vanke Co | Ligao Foods vs. China Merchants Shekou | Ligao Foods vs. Huafa Industrial Co |
| Tonghua Grape vs. Chengdu Spaceon Electronics | Tonghua Grape vs. Qingdao Foods Co | Tonghua Grape vs. AVIC Fund Management | Tonghua Grape vs. Jiahe Foods Industry |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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