Correlation Between Ligao Foods and Eastern Air
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By analyzing existing cross correlation between Ligao Foods CoLtd and Eastern Air Logistics, you can compare the effects of market volatilities on Ligao Foods and Eastern Air 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 Eastern Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligao Foods and Eastern Air.
Diversification Opportunities for Ligao Foods and Eastern Air
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ligao and Eastern is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ligao Foods CoLtd and Eastern Air Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Air Logistics 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 Eastern Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Air Logistics has no effect on the direction of Ligao Foods i.e., Ligao Foods and Eastern Air go up and down completely randomly.
Pair Corralation between Ligao Foods and Eastern Air
Assuming the 90 days trading horizon Ligao Foods CoLtd is expected to generate 2.42 times more return on investment than Eastern Air. However, Ligao Foods is 2.42 times more volatile than Eastern Air Logistics. It trades about 0.09 of its potential returns per unit of risk. Eastern Air Logistics is currently generating about -0.2 per unit of risk. If you would invest 4,029 in Ligao Foods CoLtd on September 12, 2024 and sell it today you would earn a total of 241.00 from holding Ligao Foods CoLtd or generate 5.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.65% |
Values | Daily Returns |
Ligao Foods CoLtd vs. Eastern Air Logistics
Performance |
Timeline |
Ligao Foods CoLtd |
Eastern Air Logistics |
Ligao Foods and Eastern Air Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ligao Foods and Eastern Air
The main advantage of trading using opposite Ligao Foods and Eastern Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligao Foods position performs unexpectedly, Eastern Air 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 Eastern Air will offset losses from the drop in Eastern Air's long position.Ligao Foods vs. China Petroleum Chemical | Ligao Foods vs. PetroChina Co Ltd | Ligao Foods vs. China State Construction | Ligao Foods vs. China Railway Group |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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