Correlation Between JGCHEMICALS and ADF Foods
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By analyzing existing cross correlation between JGCHEMICALS LIMITED and ADF Foods Limited, you can compare the effects of market volatilities on JGCHEMICALS 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 JGCHEMICALS with a short position of ADF Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of JGCHEMICALS and ADF Foods.
Diversification Opportunities for JGCHEMICALS and ADF Foods
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JGCHEMICALS and ADF is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding JGCHEMICALS 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 JGCHEMICALS 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 JGCHEMICALS 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 JGCHEMICALS i.e., JGCHEMICALS and ADF Foods go up and down completely randomly.
Pair Corralation between JGCHEMICALS and ADF Foods
Assuming the 90 days trading horizon JGCHEMICALS LIMITED is expected to generate 0.75 times more return on investment than ADF Foods. However, JGCHEMICALS LIMITED is 1.34 times less risky than ADF Foods. It trades about -0.49 of its potential returns per unit of risk. ADF Foods Limited is currently generating about -0.48 per unit of risk. If you would invest 43,235 in JGCHEMICALS LIMITED on October 16, 2024 and sell it today you would lose (7,955) from holding JGCHEMICALS LIMITED or give up 18.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JGCHEMICALS LIMITED vs. ADF Foods Limited
Performance |
| Timeline |
| JGCHEMICALS LIMITED |
| ADF Foods Limited |
JGCHEMICALS and ADF Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JGCHEMICALS and ADF Foods
The main advantage of trading using opposite JGCHEMICALS and ADF Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JGCHEMICALS 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.| JGCHEMICALS vs. Total Transport Systems | JGCHEMICALS vs. Mahamaya Steel Industries | JGCHEMICALS vs. NMDC Steel Limited | JGCHEMICALS vs. Prakash Steelage Limited |
| ADF Foods vs. Varun Beverages Limited | ADF Foods vs. SBI Life Insurance | ADF Foods vs. Agro Tech Foods | ADF Foods vs. General Insurance |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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