Correlation Between ADF Foods and Golden Tobacco
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By analyzing existing cross correlation between ADF Foods Limited and Golden Tobacco Limited, you can compare the effects of market volatilities on ADF Foods and Golden Tobacco 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 Golden Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADF Foods and Golden Tobacco.
Diversification Opportunities for ADF Foods and Golden Tobacco
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between ADF and Golden is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding ADF Foods Limited and Golden Tobacco Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Tobacco 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 Golden Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Tobacco has no effect on the direction of ADF Foods i.e., ADF Foods and Golden Tobacco go up and down completely randomly.
Pair Corralation between ADF Foods and Golden Tobacco
Assuming the 90 days trading horizon ADF Foods Limited is expected to generate 1.5 times more return on investment than Golden Tobacco. However, ADF Foods is 1.5 times more volatile than Golden Tobacco Limited. It trades about 0.07 of its potential returns per unit of risk. Golden Tobacco Limited is currently generating about 0.01 per unit of risk. If you would invest 28,957 in ADF Foods Limited on September 12, 2024 and sell it today you would earn a total of 3,573 from holding ADF Foods Limited or generate 12.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
ADF Foods Limited vs. Golden Tobacco Limited
Performance |
| Timeline |
| ADF Foods Limited |
| Golden Tobacco |
ADF Foods and Golden Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADF Foods and Golden Tobacco
The main advantage of trading using opposite ADF Foods and Golden Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADF Foods position performs unexpectedly, Golden Tobacco 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 Golden Tobacco will offset losses from the drop in Golden Tobacco's long position.| ADF Foods vs. State Bank of | ADF Foods vs. Life Insurance | ADF Foods vs. HDFC Bank Limited | ADF Foods vs. ICICI Bank Limited |
| Golden Tobacco vs. Network18 Media Investments | Golden Tobacco vs. Tata Investment | Golden Tobacco vs. VIP Clothing Limited | Golden Tobacco vs. AUTHUM INVESTMENT INFRASTRUCTU |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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