Correlation Between Zhongtong Guomai and Ligao Foods
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By analyzing existing cross correlation between Zhongtong Guomai Communication and Ligao Foods CoLtd, you can compare the effects of market volatilities on Zhongtong Guomai 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 Zhongtong Guomai with a short position of Ligao Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongtong Guomai and Ligao Foods.
Diversification Opportunities for Zhongtong Guomai and Ligao Foods
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhongtong and Ligao is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Zhongtong Guomai Communication 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 Zhongtong Guomai 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 Zhongtong Guomai Communication 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 Zhongtong Guomai i.e., Zhongtong Guomai and Ligao Foods go up and down completely randomly.
Pair Corralation between Zhongtong Guomai and Ligao Foods
Assuming the 90 days trading horizon Zhongtong Guomai Communication is expected to under-perform the Ligao Foods. In addition to that, Zhongtong Guomai is 1.17 times more volatile than Ligao Foods CoLtd. It trades about -0.01 of its total potential returns per unit of risk. Ligao Foods CoLtd is currently generating about 0.11 per unit of volatility. If you would invest 3,689 in Ligao Foods CoLtd on September 3, 2024 and sell it today you would earn a total of 283.00 from holding Ligao Foods CoLtd or generate 7.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongtong Guomai Communication vs. Ligao Foods CoLtd
Performance |
| Timeline |
| Zhongtong Guomai Com |
| Ligao Foods CoLtd |
Zhongtong Guomai and Ligao Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongtong Guomai and Ligao Foods
The main advantage of trading using opposite Zhongtong Guomai and Ligao Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongtong Guomai 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.| Zhongtong Guomai vs. Agricultural Bank of | Zhongtong Guomai vs. China Construction Bank | Zhongtong Guomai vs. Postal Savings Bank | Zhongtong Guomai vs. Bank of Communications |
| 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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