Correlation Between Suzhou Weizhixiang and Ligao Foods
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By analyzing existing cross correlation between Suzhou Weizhixiang Food and Ligao Foods CoLtd, you can compare the effects of market volatilities on Suzhou Weizhixiang 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 Suzhou Weizhixiang with a short position of Ligao Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suzhou Weizhixiang and Ligao Foods.
Diversification Opportunities for Suzhou Weizhixiang and Ligao Foods
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Suzhou and Ligao is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Suzhou Weizhixiang 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 Suzhou Weizhixiang 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 Suzhou Weizhixiang 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 Suzhou Weizhixiang i.e., Suzhou Weizhixiang and Ligao Foods go up and down completely randomly.
Pair Corralation between Suzhou Weizhixiang and Ligao Foods
Assuming the 90 days trading horizon Suzhou Weizhixiang Food is expected to under-perform the Ligao Foods. But the stock apears to be less risky and, when comparing its historical volatility, Suzhou Weizhixiang Food is 1.17 times less risky than Ligao Foods. The stock trades about -0.16 of its potential returns per unit of risk. The Ligao Foods CoLtd is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,948 in Ligao Foods CoLtd on November 3, 2024 and sell it today you would earn a total of 76.00 from holding Ligao Foods CoLtd or generate 1.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suzhou Weizhixiang Food vs. Ligao Foods CoLtd
Performance |
| Timeline |
| Suzhou Weizhixiang Food |
| Ligao Foods CoLtd |
Suzhou Weizhixiang and Ligao Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suzhou Weizhixiang and Ligao Foods
The main advantage of trading using opposite Suzhou Weizhixiang and Ligao Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suzhou Weizhixiang 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.| Suzhou Weizhixiang vs. China Longyuan Power | Suzhou Weizhixiang vs. PetroChina Co Ltd | Suzhou Weizhixiang vs. Guangxi Guiguan Electric | Suzhou Weizhixiang vs. Yantai North Andre |
| Ligao Foods vs. Guangzhou Restaurants Group | Ligao Foods vs. Healthcare Co | Ligao Foods vs. Goodwill E Health | Ligao Foods vs. Sinofibers Technology 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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