Correlation Between BF Investment and ADF Foods
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By analyzing existing cross correlation between BF Investment Limited and ADF Foods Limited, you can compare the effects of market volatilities on BF Investment 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 BF Investment with a short position of ADF Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of BF Investment and ADF Foods.
Diversification Opportunities for BF Investment and ADF Foods
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BFINVEST and ADF is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding BF Investment 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 BF Investment 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 BF Investment 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 BF Investment i.e., BF Investment and ADF Foods go up and down completely randomly.
Pair Corralation between BF Investment and ADF Foods
Assuming the 90 days trading horizon BF Investment Limited is expected to generate 1.05 times more return on investment than ADF Foods. However, BF Investment is 1.05 times more volatile than ADF Foods Limited. It trades about 0.22 of its potential returns per unit of risk. ADF Foods Limited is currently generating about 0.22 per unit of risk. If you would invest 65,065 in BF Investment Limited on September 1, 2024 and sell it today you would earn a total of 8,215 from holding BF Investment Limited or generate 12.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BF Investment Limited vs. ADF Foods Limited
Performance |
| Timeline |
| BF Investment Limited |
| ADF Foods Limited |
BF Investment and ADF Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BF Investment and ADF Foods
The main advantage of trading using opposite BF Investment and ADF Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BF Investment 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.| BF Investment vs. Madhav Copper Limited | BF Investment vs. Neogen Chemicals Limited | BF Investment vs. Ratnamani Metals Tubes | BF Investment vs. Tips Music Limited |
| ADF Foods vs. Kingfa Science Technology | ADF Foods vs. Rico Auto Industries | ADF Foods vs. GACM Technologies Limited | ADF Foods vs. COSMO FIRST 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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