Correlation Between Sichuan Teway and Ligao Foods
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By analyzing existing cross correlation between Sichuan Teway Food and Ligao Foods CoLtd, you can compare the effects of market volatilities on Sichuan Teway 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 Sichuan Teway with a short position of Ligao Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Teway and Ligao Foods.
Diversification Opportunities for Sichuan Teway and Ligao Foods
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sichuan and Ligao is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Teway Food 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 Sichuan Teway 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 Sichuan Teway Food 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 Sichuan Teway i.e., Sichuan Teway and Ligao Foods go up and down completely randomly.
Pair Corralation between Sichuan Teway and Ligao Foods
Assuming the 90 days trading horizon Sichuan Teway Food is expected to generate 0.73 times more return on investment than Ligao Foods. However, Sichuan Teway Food is 1.37 times less risky than Ligao Foods. It trades about -0.03 of its potential returns per unit of risk. Ligao Foods CoLtd is currently generating about -0.05 per unit of risk. If you would invest 2,005 in Sichuan Teway Food on September 3, 2024 and sell it today you would lose (623.00) from holding Sichuan Teway Food or give up 31.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Teway Food vs. Ligao Foods CoLtd
Performance |
| Timeline |
| Sichuan Teway Food |
| Ligao Foods CoLtd |
Sichuan Teway and Ligao Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Teway and Ligao Foods
The main advantage of trading using opposite Sichuan Teway and Ligao Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Teway 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.| Sichuan Teway vs. Beijing Wantai Biological | Sichuan Teway vs. Aluminum Corp of | Sichuan Teway vs. COL Digital Publishing | Sichuan Teway vs. Shaanxi Meineng Clean |
| Ligao Foods vs. Beijing Wantai Biological | Ligao Foods vs. Aluminum Corp of | Ligao Foods vs. COL Digital Publishing | Ligao Foods vs. Shaanxi Meineng Clean |
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 Stocks Directory module to find actively traded stocks across global markets.
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