Correlation Between ADF Foods and Cybertech Systems

Can any of the company-specific risk be diversified away by investing in both ADF Foods and Cybertech Systems at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ADF Foods and Cybertech Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ADF Foods Limited and Cybertech Systems And, you can compare the effects of market volatilities on ADF Foods and Cybertech Systems 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 Cybertech Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADF Foods and Cybertech Systems.

Diversification Opportunities for ADF Foods and Cybertech Systems

0.76

Correlation Coefficient

ADF Foods  Cybertech Systems

Poor diversification

The 3 months correlation between ADF and Cybertech is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding ADF Foods Limited and Cybertech Systems And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cybertech Systems And 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 Cybertech Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cybertech Systems And has no effect on the direction of ADF Foods i.e., ADF Foods and Cybertech Systems go up and down completely randomly.

Pair Corralation between ADF Foods and Cybertech Systems

Assuming the 90 days trading horizon ADF Foods Limited is expected to generate 1.46 times more return on investment than Cybertech Systems. However, ADF Foods is 1.46 times more volatile than Cybertech Systems And. It trades about 0.09 of its potential returns per unit of risk. Cybertech Systems And is currently generating about 0.1 per unit of risk. If you would invest  23,415  in ADF Foods Limited on April 24, 2025 and sell it today you would earn a total of  3,615  from holding ADF Foods Limited or generate 15.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

ADF Foods Limited  vs.  Cybertech Systems And

ADF Foods Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ADF Foods Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, ADF Foods exhibited solid returns over the last few months and may actually be approaching a breakup point.

Cybertech Systems And

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cybertech Systems And are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Cybertech Systems exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ADF Foods and Cybertech Systems

The main advantage of trading using opposite ADF Foods and Cybertech Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADF Foods position performs unexpectedly, Cybertech Systems 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 Cybertech Systems will offset losses from the drop in Cybertech Systems' long position.

The idea behind ADF Foods Limited and Cybertech Systems And pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..