Correlation Between ADF Foods and V2 Retail
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By analyzing existing cross correlation between ADF Foods Limited and V2 Retail Limited, you can compare the effects of market volatilities on ADF Foods and V2 Retail 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 V2 Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADF Foods and V2 Retail.
Diversification Opportunities for ADF Foods and V2 Retail
Very weak diversification
The 3 months correlation between ADF and V2RETAIL is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding ADF Foods Limited and V2 Retail Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V2 Retail 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 V2 Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V2 Retail Limited has no effect on the direction of ADF Foods i.e., ADF Foods and V2 Retail go up and down completely randomly.
Pair Corralation between ADF Foods and V2 Retail
Assuming the 90 days trading horizon ADF Foods is expected to generate 1.5 times less return on investment than V2 Retail. But when comparing it to its historical volatility, ADF Foods Limited is 1.26 times less risky than V2 Retail. It trades about 0.22 of its potential returns per unit of risk. V2 Retail Limited is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 112,540 in V2 Retail Limited on September 1, 2024 and sell it today you would earn a total of 19,975 from holding V2 Retail Limited or generate 17.75% 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. V2 Retail Limited
Performance |
| Timeline |
| ADF Foods Limited |
| V2 Retail Limited |
ADF Foods and V2 Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADF Foods and V2 Retail
The main advantage of trading using opposite ADF Foods and V2 Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADF Foods position performs unexpectedly, V2 Retail 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 V2 Retail will offset losses from the drop in V2 Retail'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 |
| V2 Retail vs. Indian Railway Finance | V2 Retail vs. Cholamandalam Financial Holdings | V2 Retail vs. Reliance Industries Limited | V2 Retail 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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