Correlation Between Chongqing Brewery and Ligao Foods
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By analyzing existing cross correlation between Chongqing Brewery Co and Ligao Foods CoLtd, you can compare the effects of market volatilities on Chongqing Brewery and Ligao Foods 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 Chongqing Brewery with a short position of Ligao Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Brewery and Ligao Foods.
Diversification Opportunities for Chongqing Brewery and Ligao Foods
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chongqing and Ligao is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Brewery Co and Ligao Foods CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ligao Foods CoLtd and Chongqing Brewery 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 Chongqing Brewery Co are associated (or correlated) with Ligao Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ligao Foods CoLtd has no effect on the direction of Chongqing Brewery i.e., Chongqing Brewery and Ligao Foods go up and down completely randomly.
Pair Corralation between Chongqing Brewery and Ligao Foods
Assuming the 90 days trading horizon Chongqing Brewery Co is expected to under-perform the Ligao Foods. But the stock apears to be less risky and, when comparing its historical volatility, Chongqing Brewery Co is 1.86 times less risky than Ligao Foods. The stock trades about -0.38 of its potential returns per unit of risk. The Ligao Foods CoLtd is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,772 in Ligao Foods CoLtd on November 4, 2024 and sell it today you would earn a total of 252.00 from holding Ligao Foods CoLtd or generate 6.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Brewery Co vs. Ligao Foods CoLtd
Performance |
| Timeline |
| Chongqing Brewery |
| Ligao Foods CoLtd |
Chongqing Brewery and Ligao Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Brewery and Ligao Foods
The main advantage of trading using opposite Chongqing Brewery and Ligao Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Brewery position performs unexpectedly, Ligao Foods 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 Ligao Foods will offset losses from the drop in Ligao Foods' long position.| Chongqing Brewery vs. Qtone Education Group | Chongqing Brewery vs. Jinhui Mining Co | Chongqing Brewery vs. Guangdong Silvere Sci | Chongqing Brewery vs. Jiangxi Naipu Mining |
| Ligao Foods vs. Fangda Special Steel | Ligao Foods vs. Heilongjiang Transport Development | Ligao Foods vs. Baoshan Iron Steel | Ligao Foods vs. GreenTech Environmental 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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