Correlation Between ADF Foods and Eros International
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By analyzing existing cross correlation between ADF Foods Limited and Eros International Media, you can compare the effects of market volatilities on ADF Foods and Eros International 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 ADF Foods with a short position of Eros International. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADF Foods and Eros International.
Diversification Opportunities for ADF Foods and Eros International
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ADF and Eros is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding ADF Foods Limited and Eros International Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eros International Media and ADF 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 ADF Foods Limited are associated (or correlated) with Eros International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eros International Media has no effect on the direction of ADF Foods i.e., ADF Foods and Eros International go up and down completely randomly.
Pair Corralation between ADF Foods and Eros International
Assuming the 90 days trading horizon ADF Foods Limited is expected to generate 8.68 times more return on investment than Eros International. However, ADF Foods is 8.68 times more volatile than Eros International Media. It trades about 0.06 of its potential returns per unit of risk. Eros International Media is currently generating about -0.04 per unit of risk. If you would invest 14,646 in ADF Foods Limited on October 26, 2024 and sell it today you would earn a total of 11,289 from holding ADF Foods Limited or generate 77.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
ADF Foods Limited vs. Eros International Media
Performance |
| Timeline |
| ADF Foods Limited |
| Eros International Media |
ADF Foods and Eros International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADF Foods and Eros International
The main advantage of trading using opposite ADF Foods and Eros International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADF Foods position performs unexpectedly, Eros International 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 Eros International will offset losses from the drop in Eros International's long position.| ADF Foods vs. Jindal Poly Investment | ADF Foods vs. Mask Investments Limited | ADF Foods vs. Tree House Education | ADF Foods vs. Nalwa Sons Investments |
| Eros International vs. Infomedia Press Limited | Eros International vs. Network18 Media Investments | Eros International vs. Radaan Mediaworks India | Eros International vs. ZF Commercial Vehicle |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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