Correlation Between Long Yuan and Ligao Foods
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By analyzing existing cross correlation between Long Yuan Construction and Ligao Foods CoLtd, you can compare the effects of market volatilities on Long Yuan 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 Long Yuan with a short position of Ligao Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long Yuan and Ligao Foods.
Diversification Opportunities for Long Yuan and Ligao Foods
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Long and Ligao is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Long Yuan Construction 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 Long Yuan 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 Long Yuan Construction 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 Long Yuan i.e., Long Yuan and Ligao Foods go up and down completely randomly.
Pair Corralation between Long Yuan and Ligao Foods
Assuming the 90 days trading horizon Long Yuan Construction is expected to generate 1.29 times more return on investment than Ligao Foods. However, Long Yuan is 1.29 times more volatile than Ligao Foods CoLtd. It trades about 0.01 of its potential returns per unit of risk. Ligao Foods CoLtd is currently generating about -0.09 per unit of risk. If you would invest 399.00 in Long Yuan Construction on August 25, 2024 and sell it today you would lose (1.00) from holding Long Yuan Construction or give up 0.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Long Yuan Construction vs. Ligao Foods CoLtd
Performance |
| Timeline |
| Long Yuan Construction |
| Ligao Foods CoLtd |
Long Yuan and Ligao Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Long Yuan and Ligao Foods
The main advantage of trading using opposite Long Yuan and Ligao Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long Yuan 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.| Long Yuan vs. Mango Excellent Media | Long Yuan vs. Guangzhou Jinyi Media | Long Yuan vs. New Hope Dairy | Long Yuan vs. Beijing Sanyuan Foods |
| Ligao Foods vs. China Railway Construction | Ligao Foods vs. Focus Media Information | Ligao Foods vs. Long Yuan Construction | Ligao Foods vs. Ningbo Construction 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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