Correlation Between Ligao Foods and Hefei Metalforming
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By analyzing existing cross correlation between Ligao Foods CoLtd and Hefei Metalforming Mach, you can compare the effects of market volatilities on Ligao Foods and Hefei Metalforming 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 Hefei Metalforming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligao Foods and Hefei Metalforming.
Diversification Opportunities for Ligao Foods and Hefei Metalforming
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ligao and Hefei is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ligao Foods CoLtd and Hefei Metalforming Mach in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hefei Metalforming Mach 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 Hefei Metalforming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hefei Metalforming Mach has no effect on the direction of Ligao Foods i.e., Ligao Foods and Hefei Metalforming go up and down completely randomly.
Pair Corralation between Ligao Foods and Hefei Metalforming
Assuming the 90 days trading horizon Ligao Foods CoLtd is expected to under-perform the Hefei Metalforming. But the stock apears to be less risky and, when comparing its historical volatility, Ligao Foods CoLtd is 1.05 times less risky than Hefei Metalforming. The stock trades about -0.04 of its potential returns per unit of risk. The Hefei Metalforming Mach is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 910.00 in Hefei Metalforming Mach on October 27, 2024 and sell it today you would lose (197.00) from holding Hefei Metalforming Mach or give up 21.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ligao Foods CoLtd vs. Hefei Metalforming Mach
Performance |
| Timeline |
| Ligao Foods CoLtd |
| Hefei Metalforming Mach |
Ligao Foods and Hefei Metalforming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligao Foods and Hefei Metalforming
The main advantage of trading using opposite Ligao Foods and Hefei Metalforming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligao Foods position performs unexpectedly, Hefei Metalforming 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 Hefei Metalforming will offset losses from the drop in Hefei Metalforming's long position.| Ligao Foods vs. Hubeiyichang Transportation Group | Ligao Foods vs. Sinomach Automobile Co | Ligao Foods vs. Zotye Automobile Co | Ligao Foods vs. Dongfeng Automobile Co |
| Hefei Metalforming vs. China Minmetals Rare | Hefei Metalforming vs. Shanghai Yaoji Playing | Hefei Metalforming vs. Rising Nonferrous Metals | Hefei Metalforming vs. Western Metal Materials |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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