Correlation Between Ligao Foods and Chahua Modern
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By analyzing existing cross correlation between Ligao Foods CoLtd and Chahua Modern Housewares, you can compare the effects of market volatilities on Ligao Foods and Chahua Modern 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 Chahua Modern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligao Foods and Chahua Modern.
Diversification Opportunities for Ligao Foods and Chahua Modern
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ligao and Chahua is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Ligao Foods CoLtd and Chahua Modern Housewares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chahua Modern Housewares 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 Chahua Modern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chahua Modern Housewares has no effect on the direction of Ligao Foods i.e., Ligao Foods and Chahua Modern go up and down completely randomly.
Pair Corralation between Ligao Foods and Chahua Modern
Assuming the 90 days trading horizon Ligao Foods is expected to generate 12.48 times less return on investment than Chahua Modern. But when comparing it to its historical volatility, Ligao Foods CoLtd is 1.15 times less risky than Chahua Modern. It trades about 0.01 of its potential returns per unit of risk. Chahua Modern Housewares is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,375 in Chahua Modern Housewares on August 25, 2024 and sell it today you would earn a total of 993.00 from holding Chahua Modern Housewares or generate 72.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ligao Foods CoLtd vs. Chahua Modern Housewares
Performance |
| Timeline |
| Ligao Foods CoLtd |
| Chahua Modern Housewares |
Ligao Foods and Chahua Modern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligao Foods and Chahua Modern
The main advantage of trading using opposite Ligao Foods and Chahua Modern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligao Foods position performs unexpectedly, Chahua Modern 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 Chahua Modern will offset losses from the drop in Chahua Modern's long position.| Ligao Foods vs. China Railway Construction | Ligao Foods vs. Focus Media Information | Ligao Foods vs. Long Yuan Construction | Ligao Foods vs. Ningbo Construction Co |
| Chahua Modern vs. Xiangyang Automobile Bearing | Chahua Modern vs. Ligao Foods CoLtd | Chahua Modern vs. Xiamen Jihong Package | Chahua Modern vs. Yankershop Food Co |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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