Correlation Between Ligao Foods and Dow Jones
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By analyzing existing cross correlation between Ligao Foods CoLtd and Dow Jones Industrial, you can compare the effects of market volatilities on Ligao Foods and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ligao Foods and Dow Jones.
Diversification Opportunities for Ligao Foods and Dow Jones
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ligao and Dow is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ligao Foods CoLtd and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Ligao Foods i.e., Ligao Foods and Dow Jones go up and down completely randomly.
Pair Corralation between Ligao Foods and Dow Jones
Assuming the 90 days trading horizon Ligao Foods CoLtd is expected to generate 7.51 times more return on investment than Dow Jones. However, Ligao Foods is 7.51 times more volatile than Dow Jones Industrial. It trades about 0.24 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.02 per unit of risk. If you would invest 3,790 in Ligao Foods CoLtd on September 15, 2024 and sell it today you would earn a total of 860.00 from holding Ligao Foods CoLtd or generate 22.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 91.3% |
Values | Daily Returns |
Ligao Foods CoLtd vs. Dow Jones Industrial
Performance |
Timeline |
Ligao Foods and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Ligao Foods CoLtd
Pair trading matchups for Ligao Foods
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Ligao Foods and Dow Jones
The main advantage of trading using opposite Ligao Foods and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ligao Foods position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.Ligao Foods vs. Zhongshan Public Utilities | Ligao Foods vs. Great Sun Foods Co | Ligao Foods vs. Iat Automobile Technology | Ligao Foods vs. Xinjiang Tianrun Dairy |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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