Correlation Between Sinomach Automobile and Ligao Foods
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By analyzing existing cross correlation between Sinomach Automobile Co and Ligao Foods CoLtd, you can compare the effects of market volatilities on Sinomach Automobile 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 Sinomach Automobile with a short position of Ligao Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinomach Automobile and Ligao Foods.
Diversification Opportunities for Sinomach Automobile and Ligao Foods
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sinomach and Ligao is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sinomach Automobile 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 Sinomach Automobile 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 Sinomach Automobile 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 Sinomach Automobile i.e., Sinomach Automobile and Ligao Foods go up and down completely randomly.
Pair Corralation between Sinomach Automobile and Ligao Foods
Assuming the 90 days trading horizon Sinomach Automobile is expected to generate 1.88 times less return on investment than Ligao Foods. But when comparing it to its historical volatility, Sinomach Automobile Co is 1.31 times less risky than Ligao Foods. It trades about 0.24 of its potential returns per unit of risk. Ligao Foods CoLtd is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 3,508 in Ligao Foods CoLtd on November 5, 2024 and sell it today you would earn a total of 516.00 from holding Ligao Foods CoLtd or generate 14.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinomach Automobile Co vs. Ligao Foods CoLtd
Performance |
| Timeline |
| Sinomach Automobile |
| Ligao Foods CoLtd |
Sinomach Automobile and Ligao Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinomach Automobile and Ligao Foods
The main advantage of trading using opposite Sinomach Automobile and Ligao Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinomach Automobile 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.| Sinomach Automobile vs. Shengda Mining Co | Sinomach Automobile vs. Keda Clean Energy | Sinomach Automobile vs. Jinhui Liquor Co | Sinomach Automobile vs. Jiugui Liquor Co |
| Ligao Foods vs. Youyou Foods Co | Ligao Foods vs. Olympic Circuit Technology | Ligao Foods vs. Smartgiant Technology Co | Ligao Foods vs. Holitech Technology 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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