Correlation Between ADF Foods and General Insurance
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By analyzing existing cross correlation between ADF Foods Limited and General Insurance, you can compare the effects of market volatilities on ADF Foods and General Insurance 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 General Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADF Foods and General Insurance.
Diversification Opportunities for ADF Foods and General Insurance
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ADF and General is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding ADF Foods Limited and General Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Insurance 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 General Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Insurance has no effect on the direction of ADF Foods i.e., ADF Foods and General Insurance go up and down completely randomly.
Pair Corralation between ADF Foods and General Insurance
Assuming the 90 days trading horizon ADF Foods Limited is expected to under-perform the General Insurance. But the stock apears to be less risky and, when comparing its historical volatility, ADF Foods Limited is 1.61 times less risky than General Insurance. The stock trades about -0.46 of its potential returns per unit of risk. The General Insurance is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 44,245 in General Insurance on October 16, 2024 and sell it today you would lose (3,485) from holding General Insurance or give up 7.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADF Foods Limited vs. General Insurance
Performance |
| Timeline |
| ADF Foods Limited |
| General Insurance |
ADF Foods and General Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADF Foods and General Insurance
The main advantage of trading using opposite ADF Foods and General Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADF Foods position performs unexpectedly, General Insurance 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 General Insurance will offset losses from the drop in General Insurance's long position.| ADF Foods vs. Kingfa Science Technology | ADF Foods vs. R S Software | ADF Foods vs. FCS Software Solutions | ADF Foods vs. Compucom Software Limited |
| General Insurance vs. Associated Alcohols Breweries | General Insurance vs. Popular Vehicles and | General Insurance vs. Ravi Kumar Distilleries | General Insurance vs. Fortis Healthcare Limited |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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