Correlation Between ADF Foods and POWERGRID Infrastructure
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By analyzing existing cross correlation between ADF Foods Limited and POWERGRID Infrastructure Investment, you can compare the effects of market volatilities on ADF Foods and POWERGRID Infrastructure 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 POWERGRID Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADF Foods and POWERGRID Infrastructure.
Diversification Opportunities for ADF Foods and POWERGRID Infrastructure
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ADF and POWERGRID is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding ADF Foods Limited and POWERGRID Infrastructure Inves in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POWERGRID Infrastructure 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 POWERGRID Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POWERGRID Infrastructure has no effect on the direction of ADF Foods i.e., ADF Foods and POWERGRID Infrastructure go up and down completely randomly.
Pair Corralation between ADF Foods and POWERGRID Infrastructure
Assuming the 90 days trading horizon ADF Foods Limited is expected to generate 37.86 times more return on investment than POWERGRID Infrastructure. However, ADF Foods is 37.86 times more volatile than POWERGRID Infrastructure Investment. It trades about 0.06 of its potential returns per unit of risk. POWERGRID Infrastructure Investment is currently generating about -0.11 per unit of risk. If you would invest 14,649 in ADF Foods Limited on November 6, 2024 and sell it today you would earn a total of 12,401 from holding ADF Foods Limited or generate 84.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
ADF Foods Limited vs. POWERGRID Infrastructure Inves
Performance |
| Timeline |
| ADF Foods Limited |
| POWERGRID Infrastructure |
ADF Foods and POWERGRID Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADF Foods and POWERGRID Infrastructure
The main advantage of trading using opposite ADF Foods and POWERGRID Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADF Foods position performs unexpectedly, POWERGRID Infrastructure 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 POWERGRID Infrastructure will offset losses from the drop in POWERGRID Infrastructure's long position.| ADF Foods vs. Reliance Industries Limited | ADF Foods vs. Tata Motors Limited | ADF Foods vs. Oil Natural Gas | ADF Foods vs. HCL Technologies 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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