Replies to post #40091 on Sino Agro Food Inc (fka SIAF)

[RealDutch]

Just because two graphs looks the same doesn't mean they are correlated in any way...

You should look up the definition of a positive correlation :-)

http://www.investopedia.com/terms/p/positive-correlation.asp

[slyestjester]

Just because two graphs looks the same doesn't mean they are correlated in any way...
_____________

That's right, but if the patterns of the graphs are similar (even if they are not identical), it is highly suggestive that some of the determining factors are the same. In this case we know that Au/ag and farm products are both commodities so they might act the same on that basis. Plus SIAF is small and Chinese and therefore volatile just like Au/Ag, and investors in both are acting speculatively. See below the correlation between gold prices (GLD) and an Ag index (AGF). If PM's and AG products are unrelated why does this correlation exist? Again purely by chance?


http://finance.yahoo.com/q/bc?t=2y&s=GLD&l=on&z=l&q=l&c=agf%2C&ql=1