Correlation Between ADF Foods and Hi Tech
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By analyzing existing cross correlation between ADF Foods Limited and The Hi Tech Gears, you can compare the effects of market volatilities on ADF Foods and Hi Tech 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 Hi Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADF Foods and Hi Tech.
Diversification Opportunities for ADF Foods and Hi Tech
Very good diversification
The 3 months correlation between ADF and HITECHGEAR is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding ADF Foods Limited and The Hi Tech Gears in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Tech 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 Hi Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Tech has no effect on the direction of ADF Foods i.e., ADF Foods and Hi Tech go up and down completely randomly.
Pair Corralation between ADF Foods and Hi Tech
Assuming the 90 days trading horizon ADF Foods Limited is expected to generate 0.95 times more return on investment than Hi Tech. However, ADF Foods Limited is 1.05 times less risky than Hi Tech. It trades about 0.22 of its potential returns per unit of risk. The Hi Tech Gears is currently generating about 0.07 per unit of risk. If you would invest 29,821 in ADF Foods Limited on September 1, 2024 and sell it today you would earn a total of 3,444 from holding ADF Foods Limited or generate 11.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADF Foods Limited vs. The Hi Tech Gears
Performance |
| Timeline |
| ADF Foods Limited |
| Hi Tech |
ADF Foods and Hi Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADF Foods and Hi Tech
The main advantage of trading using opposite ADF Foods and Hi Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADF Foods position performs unexpectedly, Hi Tech 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 Hi Tech will offset losses from the drop in Hi Tech's long position.| ADF Foods vs. Kingfa Science Technology | ADF Foods vs. Rico Auto Industries | ADF Foods vs. GACM Technologies Limited | ADF Foods vs. COSMO FIRST LIMITED |
| Hi Tech vs. Bajaj Holdings Investment | Hi Tech vs. Hybrid Financial Services | Hi Tech vs. SIL Investments Limited | Hi Tech vs. Tata Investment |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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