Correlation Between ADF Foods and Punjab National
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By analyzing existing cross correlation between ADF Foods Limited and Punjab National Bank, you can compare the effects of market volatilities on ADF Foods and Punjab National 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 Punjab National. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADF Foods and Punjab National.
Diversification Opportunities for ADF Foods and Punjab National
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ADF and Punjab is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding ADF Foods Limited and Punjab National Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Punjab National Bank 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 Punjab National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Punjab National Bank has no effect on the direction of ADF Foods i.e., ADF Foods and Punjab National go up and down completely randomly.
Pair Corralation between ADF Foods and Punjab National
Assuming the 90 days trading horizon ADF Foods Limited is expected to generate 1.61 times more return on investment than Punjab National. However, ADF Foods is 1.61 times more volatile than Punjab National Bank. It trades about 0.13 of its potential returns per unit of risk. Punjab National Bank is currently generating about -0.05 per unit of risk. If you would invest 22,115 in ADF Foods Limited on September 5, 2024 and sell it today you would earn a total of 11,830 from holding ADF Foods Limited or generate 53.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
ADF Foods Limited vs. Punjab National Bank
Performance |
| Timeline |
| ADF Foods Limited |
| Punjab National Bank |
ADF Foods and Punjab National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADF Foods and Punjab National
The main advantage of trading using opposite ADF Foods and Punjab National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADF Foods position performs unexpectedly, Punjab National 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 Punjab National will offset losses from the drop in Punjab National's long position.| ADF Foods vs. Advani Hotels Resorts | ADF Foods vs. Praxis Home Retail | ADF Foods vs. Kamat Hotels Limited | ADF Foods vs. Osia Hyper Retail |
| Punjab National vs. Tamilnadu Telecommunication Limited | Punjab National vs. Paramount Communications Limited | Punjab National vs. Megastar Foods Limited | Punjab National vs. ADF Foods 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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