Correlation Between ADF Foods and JGCHEMICALS
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By analyzing existing cross correlation between ADF Foods Limited and JGCHEMICALS LIMITED, you can compare the effects of market volatilities on ADF Foods and JGCHEMICALS 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 JGCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADF Foods and JGCHEMICALS.
Diversification Opportunities for ADF Foods and JGCHEMICALS
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ADF and JGCHEMICALS is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding ADF Foods Limited and JGCHEMICALS LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JGCHEMICALS LIMITED 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 JGCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JGCHEMICALS LIMITED has no effect on the direction of ADF Foods i.e., ADF Foods and JGCHEMICALS go up and down completely randomly.
Pair Corralation between ADF Foods and JGCHEMICALS
Assuming the 90 days trading horizon ADF Foods Limited is expected to generate 6.73 times more return on investment than JGCHEMICALS. However, ADF Foods is 6.73 times more volatile than JGCHEMICALS LIMITED. It trades about 0.06 of its potential returns per unit of risk. JGCHEMICALS LIMITED is currently generating about 0.1 per unit of risk. If you would invest 14,376 in ADF Foods Limited on October 16, 2024 and sell it today you would earn a total of 11,969 from holding ADF Foods Limited or generate 83.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 42.47% |
| Values | Daily Returns |
ADF Foods Limited vs. JGCHEMICALS LIMITED
Performance |
| Timeline |
| ADF Foods Limited |
| JGCHEMICALS LIMITED |
ADF Foods and JGCHEMICALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADF Foods and JGCHEMICALS
The main advantage of trading using opposite ADF Foods and JGCHEMICALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADF Foods position performs unexpectedly, JGCHEMICALS 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 JGCHEMICALS will offset losses from the drop in JGCHEMICALS's long position.| ADF Foods vs. Varun Beverages Limited | ADF Foods vs. SBI Life Insurance | ADF Foods vs. Agro Tech Foods | ADF Foods vs. General Insurance |
| JGCHEMICALS vs. Total Transport Systems | JGCHEMICALS vs. Mahamaya Steel Industries | JGCHEMICALS vs. NMDC Steel Limited | JGCHEMICALS vs. Prakash Steelage 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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