Correlation Between Ligao Foods and Fangda Special
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By analyzing existing cross correlation between Ligao Foods CoLtd and Fangda Special Steel, you can compare the effects of market volatilities on Ligao Foods and Fangda Special 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 Fangda Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligao Foods and Fangda Special.
Diversification Opportunities for Ligao Foods and Fangda Special
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ligao and Fangda is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ligao Foods CoLtd and Fangda Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fangda Special Steel 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 Fangda Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fangda Special Steel has no effect on the direction of Ligao Foods i.e., Ligao Foods and Fangda Special go up and down completely randomly.
Pair Corralation between Ligao Foods and Fangda Special
Assuming the 90 days trading horizon Ligao Foods CoLtd is expected to under-perform the Fangda Special. In addition to that, Ligao Foods is 1.94 times more volatile than Fangda Special Steel. It trades about -0.04 of its total potential returns per unit of risk. Fangda Special Steel is currently generating about -0.02 per unit of volatility. If you would invest 561.00 in Fangda Special Steel on December 12, 2024 and sell it today you would lose (120.00) from holding Fangda Special Steel or give up 21.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ligao Foods CoLtd vs. Fangda Special Steel
Performance |
| Timeline |
| Ligao Foods CoLtd |
| Fangda Special Steel |
Ligao Foods and Fangda Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligao Foods and Fangda Special
The main advantage of trading using opposite Ligao Foods and Fangda Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligao Foods position performs unexpectedly, Fangda Special 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 Fangda Special will offset losses from the drop in Fangda Special's long position.| Ligao Foods vs. Lianhe Chemical Technology | ||
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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