Correlation Between Beijing Sanyuan and Ligao Foods
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By analyzing existing cross correlation between Beijing Sanyuan Foods and Ligao Foods CoLtd, you can compare the effects of market volatilities on Beijing Sanyuan 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 Beijing Sanyuan with a short position of Ligao Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Sanyuan and Ligao Foods.
Diversification Opportunities for Beijing Sanyuan and Ligao Foods
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Beijing and Ligao is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Sanyuan Foods 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 Beijing Sanyuan 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 Beijing Sanyuan Foods 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 Beijing Sanyuan i.e., Beijing Sanyuan and Ligao Foods go up and down completely randomly.
Pair Corralation between Beijing Sanyuan and Ligao Foods
Assuming the 90 days trading horizon Beijing Sanyuan Foods is expected to generate 0.53 times more return on investment than Ligao Foods. However, Beijing Sanyuan Foods is 1.9 times less risky than Ligao Foods. It trades about 0.0 of its potential returns per unit of risk. Ligao Foods CoLtd is currently generating about -0.04 per unit of risk. If you would invest 473.00 in Beijing Sanyuan Foods on August 31, 2024 and sell it today you would lose (22.00) from holding Beijing Sanyuan Foods or give up 4.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Sanyuan Foods vs. Ligao Foods CoLtd
Performance |
| Timeline |
| Beijing Sanyuan Foods |
| Ligao Foods CoLtd |
Beijing Sanyuan and Ligao Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Sanyuan and Ligao Foods
The main advantage of trading using opposite Beijing Sanyuan and Ligao Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Sanyuan 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.| Beijing Sanyuan vs. Lutian Machinery Co | Beijing Sanyuan vs. PetroChina Co Ltd | Beijing Sanyuan vs. Bank of China | Beijing Sanyuan vs. Gansu Jiu Steel |
| Ligao Foods vs. Lutian Machinery Co | Ligao Foods vs. PetroChina Co Ltd | Ligao Foods vs. Bank of China | Ligao Foods vs. Gansu Jiu Steel |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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