Correlation Between Asian Hotels and ADF Foods
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By analyzing existing cross correlation between Asian Hotels Limited and ADF Foods Limited, you can compare the effects of market volatilities on Asian Hotels and ADF Foods 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 Asian Hotels with a short position of ADF Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asian Hotels and ADF Foods.
Diversification Opportunities for Asian Hotels and ADF Foods
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asian and ADF is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Asian Hotels Limited and ADF Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADF Foods Limited and Asian Hotels 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 Asian Hotels Limited are associated (or correlated) with ADF Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADF Foods Limited has no effect on the direction of Asian Hotels i.e., Asian Hotels and ADF Foods go up and down completely randomly.
Pair Corralation between Asian Hotels and ADF Foods
Assuming the 90 days trading horizon Asian Hotels Limited is expected to under-perform the ADF Foods. But the stock apears to be less risky and, when comparing its historical volatility, Asian Hotels Limited is 1.14 times less risky than ADF Foods. The stock trades about -0.01 of its potential returns per unit of risk. The ADF Foods Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. 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 |
Asian Hotels Limited vs. ADF Foods Limited
Performance |
| Timeline |
| Asian Hotels Limited |
| ADF Foods Limited |
Asian Hotels and ADF Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asian Hotels and ADF Foods
The main advantage of trading using opposite Asian Hotels and ADF Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asian Hotels position performs unexpectedly, ADF Foods 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 ADF Foods will offset losses from the drop in ADF Foods' long position.| Asian Hotels vs. Indian Railway Finance | Asian Hotels vs. Cholamandalam Financial Holdings | Asian Hotels vs. Reliance Industries Limited | Asian Hotels vs. Tata Consultancy Services |
| ADF Foods vs. State Bank of | ADF Foods vs. Life Insurance | ADF Foods vs. HDFC Bank Limited | ADF Foods vs. ICICI Bank 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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