Correlation Between Ligao Foods and CNOOC
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By analyzing existing cross correlation between Ligao Foods CoLtd and CNOOC Limited, you can compare the effects of market volatilities on Ligao Foods and CNOOC 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 CNOOC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligao Foods and CNOOC.
Diversification Opportunities for Ligao Foods and CNOOC
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ligao and CNOOC is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ligao Foods CoLtd and CNOOC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNOOC Limited 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 CNOOC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNOOC Limited has no effect on the direction of Ligao Foods i.e., Ligao Foods and CNOOC go up and down completely randomly.
Pair Corralation between Ligao Foods and CNOOC
Assuming the 90 days trading horizon Ligao Foods CoLtd is expected to under-perform the CNOOC. In addition to that, Ligao Foods is 1.52 times more volatile than CNOOC Limited. It trades about -0.04 of its total potential returns per unit of risk. CNOOC Limited is currently generating about 0.08 per unit of volatility. If you would invest 1,428 in CNOOC Limited on November 7, 2024 and sell it today you would earn a total of 1,323 from holding CNOOC Limited or generate 92.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ligao Foods CoLtd vs. CNOOC Limited
Performance |
| Timeline |
| Ligao Foods CoLtd |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| CNOOC Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Ligao Foods and CNOOC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligao Foods and CNOOC
The main advantage of trading using opposite Ligao Foods and CNOOC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligao Foods position performs unexpectedly, CNOOC 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 CNOOC will offset losses from the drop in CNOOC's long position.The idea behind Ligao Foods CoLtd and CNOOC Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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