Correlation Between Shandong Homey and Ligao Foods
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By analyzing existing cross correlation between Shandong Homey Aquatic and Ligao Foods CoLtd, you can compare the effects of market volatilities on Shandong Homey 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 Shandong Homey with a short position of Ligao Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Homey and Ligao Foods.
Diversification Opportunities for Shandong Homey and Ligao Foods
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Ligao is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Homey Aquatic 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 Shandong Homey 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 Shandong Homey Aquatic 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 Shandong Homey i.e., Shandong Homey and Ligao Foods go up and down completely randomly.
Pair Corralation between Shandong Homey and Ligao Foods
Assuming the 90 days trading horizon Shandong Homey Aquatic is expected to generate 0.83 times more return on investment than Ligao Foods. However, Shandong Homey Aquatic is 1.2 times less risky than Ligao Foods. It trades about 0.0 of its potential returns per unit of risk. Ligao Foods CoLtd is currently generating about -0.04 per unit of risk. If you would invest 258.00 in Shandong Homey Aquatic on October 25, 2024 and sell it today you would lose (40.00) from holding Shandong Homey Aquatic or give up 15.5% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Shandong Homey Aquatic vs. Ligao Foods CoLtd
Performance |
Timeline |
Shandong Homey Aquatic |
Ligao Foods CoLtd |
Shandong Homey and Ligao Foods Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shandong Homey and Ligao Foods
The main advantage of trading using opposite Shandong Homey and Ligao Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Homey 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.Shandong Homey vs. Agricultural Bank of | Shandong Homey vs. Postal Savings Bank | Shandong Homey vs. Bank of Communications | Shandong Homey vs. China Merchants Bank |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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