Correlation Between Ligao Foods and Zhongtong Guomai
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By analyzing existing cross correlation between Ligao Foods CoLtd and Zhongtong Guomai Communication, you can compare the effects of market volatilities on Ligao Foods and Zhongtong Guomai 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 Zhongtong Guomai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligao Foods and Zhongtong Guomai.
Diversification Opportunities for Ligao Foods and Zhongtong Guomai
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ligao and Zhongtong is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Ligao Foods CoLtd and Zhongtong Guomai Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongtong Guomai Com 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 Zhongtong Guomai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongtong Guomai Com has no effect on the direction of Ligao Foods i.e., Ligao Foods and Zhongtong Guomai go up and down completely randomly.
Pair Corralation between Ligao Foods and Zhongtong Guomai
Assuming the 90 days trading horizon Ligao Foods CoLtd is expected to generate 0.85 times more return on investment than Zhongtong Guomai. However, Ligao Foods CoLtd is 1.18 times less risky than Zhongtong Guomai. It trades about 0.11 of its potential returns per unit of risk. Zhongtong Guomai Communication is currently generating about -0.03 per unit of risk. If you would invest 3,689 in Ligao Foods CoLtd on September 4, 2024 and sell it today you would earn a total of 283.00 from holding Ligao Foods CoLtd or generate 7.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ligao Foods CoLtd vs. Zhongtong Guomai Communication
Performance |
| Timeline |
| Ligao Foods CoLtd |
| Zhongtong Guomai Com |
Ligao Foods and Zhongtong Guomai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligao Foods and Zhongtong Guomai
The main advantage of trading using opposite Ligao Foods and Zhongtong Guomai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligao Foods position performs unexpectedly, Zhongtong Guomai 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 Zhongtong Guomai will offset losses from the drop in Zhongtong Guomai's long position.| Ligao Foods vs. Poly Real Estate | Ligao Foods vs. China Vanke Co | Ligao Foods vs. China Merchants Shekou | Ligao Foods vs. Huafa Industrial Co |
| Zhongtong Guomai vs. Wuhan Xianglong Power | Zhongtong Guomai vs. Yuanjie Semiconductor Technology | Zhongtong Guomai vs. Kuang Chi Technologies | Zhongtong Guomai vs. Yunnan Bowin Technology |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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