Correlation Between ADF Foods and Investment Trust
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By analyzing existing cross correlation between ADF Foods Limited and The Investment Trust, you can compare the effects of market volatilities on ADF Foods and Investment Trust 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 Investment Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADF Foods and Investment Trust.
Diversification Opportunities for ADF Foods and Investment Trust
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ADF and Investment is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding ADF Foods Limited and The Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment Trust 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 Investment Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment Trust has no effect on the direction of ADF Foods i.e., ADF Foods and Investment Trust go up and down completely randomly.
Pair Corralation between ADF Foods and Investment Trust
Assuming the 90 days trading horizon ADF Foods Limited is expected to generate 0.96 times more return on investment than Investment Trust. However, ADF Foods Limited is 1.05 times less risky than Investment Trust. It trades about 0.22 of its potential returns per unit of risk. The Investment Trust is currently generating about -0.08 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADF Foods Limited vs. The Investment Trust
Performance |
| Timeline |
| ADF Foods Limited |
| Investment Trust |
ADF Foods and Investment Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADF Foods and Investment Trust
The main advantage of trading using opposite ADF Foods and Investment Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADF Foods position performs unexpectedly, Investment Trust 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 Investment Trust will offset losses from the drop in Investment Trust'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 |
| Investment Trust vs. Nalwa Sons Investments | Investment Trust vs. Kalyani Investment | Investment Trust vs. Pilani Investment and | Investment Trust vs. Vardhman Holdings 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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