Correlation Between ADF Foods and Kamat Hotels
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By analyzing existing cross correlation between ADF Foods Limited and Kamat Hotels Limited, you can compare the effects of market volatilities on ADF Foods and Kamat Hotels 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 Kamat Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADF Foods and Kamat Hotels.
Diversification Opportunities for ADF Foods and Kamat Hotels
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ADF and Kamat is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding ADF Foods Limited and Kamat Hotels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamat Hotels 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 Kamat Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kamat Hotels Limited has no effect on the direction of ADF Foods i.e., ADF Foods and Kamat Hotels go up and down completely randomly.
Pair Corralation between ADF Foods and Kamat Hotels
Assuming the 90 days trading horizon ADF Foods Limited is expected to generate 1.09 times more return on investment than Kamat Hotels. However, ADF Foods is 1.09 times more volatile than Kamat Hotels Limited. It trades about 0.08 of its potential returns per unit of risk. Kamat Hotels Limited is currently generating about -0.01 per unit of risk. If you would invest 20,100 in ADF Foods Limited on September 14, 2024 and sell it today you would earn a total of 12,845 from holding ADF Foods Limited or generate 63.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.18% |
| Values | Daily Returns |
ADF Foods Limited vs. Kamat Hotels Limited
Performance |
| Timeline |
| ADF Foods Limited |
| Kamat Hotels Limited |
ADF Foods and Kamat Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADF Foods and Kamat Hotels
The main advantage of trading using opposite ADF Foods and Kamat Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADF Foods position performs unexpectedly, Kamat Hotels 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 Kamat Hotels will offset losses from the drop in Kamat Hotels' 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 |
| Kamat Hotels vs. Indian Railway Finance | Kamat Hotels vs. Cholamandalam Financial Holdings | Kamat Hotels vs. Reliance Industries Limited | Kamat Hotels vs. Tata Consultancy Services |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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