Correlation Between Ligao Foods and Liaoning Chengda
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By analyzing existing cross correlation between Ligao Foods CoLtd and Liaoning Chengda Biotechnology, you can compare the effects of market volatilities on Ligao Foods and Liaoning Chengda 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 Liaoning Chengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligao Foods and Liaoning Chengda.
Diversification Opportunities for Ligao Foods and Liaoning Chengda
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ligao and Liaoning is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ligao Foods CoLtd and Liaoning Chengda Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Chengda Bio 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 Liaoning Chengda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Chengda Bio has no effect on the direction of Ligao Foods i.e., Ligao Foods and Liaoning Chengda go up and down completely randomly.
Pair Corralation between Ligao Foods and Liaoning Chengda
Assuming the 90 days trading horizon Ligao Foods CoLtd is expected to generate 2.9 times more return on investment than Liaoning Chengda. However, Ligao Foods is 2.9 times more volatile than Liaoning Chengda Biotechnology. It trades about -0.02 of its potential returns per unit of risk. Liaoning Chengda Biotechnology is currently generating about -0.28 per unit of risk. If you would invest 4,071 in Ligao Foods CoLtd on October 25, 2024 and sell it today you would lose (97.00) from holding Ligao Foods CoLtd or give up 2.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ligao Foods CoLtd vs. Liaoning Chengda Biotechnology
Performance |
| Timeline |
| Ligao Foods CoLtd |
| Liaoning Chengda Bio |
Ligao Foods and Liaoning Chengda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ligao Foods and Liaoning Chengda
The main advantage of trading using opposite Ligao Foods and Liaoning Chengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligao Foods position performs unexpectedly, Liaoning Chengda 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 Liaoning Chengda will offset losses from the drop in Liaoning Chengda's long position.| Ligao Foods vs. Chongqing Brewery Co | Ligao Foods vs. Guocheng Mining Co | Ligao Foods vs. Jiangsu Yanghe Brewery | Ligao Foods vs. JCHX Mining Management |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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