Correlation Between Ligao Foods and Zhongtai Securities
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By analyzing existing cross correlation between Ligao Foods CoLtd and Zhongtai Securities Co, you can compare the effects of market volatilities on Ligao Foods and Zhongtai Securities 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 Zhongtai Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligao Foods and Zhongtai Securities.
Diversification Opportunities for Ligao Foods and Zhongtai Securities
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ligao and Zhongtai is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ligao Foods CoLtd and Zhongtai Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongtai Securities 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 Zhongtai Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongtai Securities has no effect on the direction of Ligao Foods i.e., Ligao Foods and Zhongtai Securities go up and down completely randomly.
Pair Corralation between Ligao Foods and Zhongtai Securities
Assuming the 90 days trading horizon Ligao Foods CoLtd is expected to generate 1.99 times more return on investment than Zhongtai Securities. However, Ligao Foods is 1.99 times more volatile than Zhongtai Securities Co. It trades about 0.0 of its potential returns per unit of risk. Zhongtai Securities Co is currently generating about -0.22 per unit of risk. If you would invest 4,041 in Ligao Foods CoLtd on October 24, 2024 and sell it today you would lose (32.00) from holding Ligao Foods CoLtd or give up 0.79% 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. Zhongtai Securities Co
Performance |
| Timeline |
| Ligao Foods CoLtd |
| Zhongtai Securities |
Ligao Foods and Zhongtai Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligao Foods and Zhongtai Securities
The main advantage of trading using opposite Ligao Foods and Zhongtai Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligao Foods position performs unexpectedly, Zhongtai Securities 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 Zhongtai Securities will offset losses from the drop in Zhongtai Securities' long position.| Ligao Foods vs. HUAQIN TECHNOLOGY LTD | Ligao Foods vs. Eyebright Medical Technology | Ligao Foods vs. Tianshui Huatian Technology | Ligao Foods vs. Queclink Wireless Solutions |
| Zhongtai Securities vs. Air China Ltd | Zhongtai Securities vs. Sanxiang Advanced Materials | Zhongtai Securities vs. Maoming Petro Chemical Shihua | Zhongtai Securities vs. Shanghai Phichem Material |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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