Correlation Between Ligao Foods and Xiangyang Automobile
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By analyzing existing cross correlation between Ligao Foods CoLtd and Xiangyang Automobile Bearing, you can compare the effects of market volatilities on Ligao Foods and Xiangyang Automobile 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 Ligao Foods with a short position of Xiangyang Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligao Foods and Xiangyang Automobile.
Diversification Opportunities for Ligao Foods and Xiangyang Automobile
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ligao and Xiangyang is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Ligao Foods CoLtd and Xiangyang Automobile Bearing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiangyang Automobile and Ligao Foods 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 Ligao Foods CoLtd are associated (or correlated) with Xiangyang Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiangyang Automobile has no effect on the direction of Ligao Foods i.e., Ligao Foods and Xiangyang Automobile go up and down completely randomly.
Pair Corralation between Ligao Foods and Xiangyang Automobile
Assuming the 90 days trading horizon Ligao Foods CoLtd is expected to generate 1.2 times more return on investment than Xiangyang Automobile. However, Ligao Foods is 1.2 times more volatile than Xiangyang Automobile Bearing. It trades about 0.05 of its potential returns per unit of risk. Xiangyang Automobile Bearing is currently generating about -0.02 per unit of risk. If you would invest 3,748 in Ligao Foods CoLtd on September 6, 2024 and sell it today you would earn a total of 103.00 from holding Ligao Foods CoLtd or generate 2.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Ligao Foods CoLtd vs. Xiangyang Automobile Bearing
Performance |
Timeline |
Ligao Foods CoLtd |
Xiangyang Automobile |
Ligao Foods and Xiangyang Automobile Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ligao Foods and Xiangyang Automobile
The main advantage of trading using opposite Ligao Foods and Xiangyang Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligao Foods position performs unexpectedly, Xiangyang Automobile 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 Xiangyang Automobile will offset losses from the drop in Xiangyang Automobile's long position.Ligao Foods vs. Industrial and Commercial | Ligao Foods vs. Agricultural Bank of | Ligao Foods vs. China Construction Bank | Ligao Foods vs. Bank of China |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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