Correlation Between Guangzhou Restaurants and Ligao Foods
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By analyzing existing cross correlation between Guangzhou Restaurants Group and Ligao Foods CoLtd, you can compare the effects of market volatilities on Guangzhou Restaurants 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 Guangzhou Restaurants with a short position of Ligao Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Restaurants and Ligao Foods.
Diversification Opportunities for Guangzhou Restaurants and Ligao Foods
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangzhou and Ligao is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Restaurants Group 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 Guangzhou Restaurants 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 Guangzhou Restaurants Group 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 Guangzhou Restaurants i.e., Guangzhou Restaurants and Ligao Foods go up and down completely randomly.
Pair Corralation between Guangzhou Restaurants and Ligao Foods
Assuming the 90 days trading horizon Guangzhou Restaurants Group is expected to under-perform the Ligao Foods. But the stock apears to be less risky and, when comparing its historical volatility, Guangzhou Restaurants Group is 1.67 times less risky than Ligao Foods. The stock trades about -0.07 of its potential returns per unit of risk. The Ligao Foods CoLtd is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 7,014 in Ligao Foods CoLtd on September 4, 2024 and sell it today you would lose (3,042) from holding Ligao Foods CoLtd or give up 43.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Restaurants Group vs. Ligao Foods CoLtd
Performance |
| Timeline |
| Guangzhou Restaurants |
| Ligao Foods CoLtd |
Guangzhou Restaurants and Ligao Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Restaurants and Ligao Foods
The main advantage of trading using opposite Guangzhou Restaurants and Ligao Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Restaurants 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.| Guangzhou Restaurants vs. New China Life | Guangzhou Restaurants vs. Ming Yang Smart | Guangzhou Restaurants vs. 159681 | Guangzhou Restaurants vs. 159005 |
| Ligao Foods vs. Poly Real Estate | Ligao Foods vs. China Vanke Co | Ligao Foods vs. China Merchants Shekou | Ligao Foods vs. Huafa Industrial 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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