Correlation Between ADF Foods and DJ Mediaprint

Can any of the company-specific risk be diversified away by investing in both ADF Foods and DJ Mediaprint 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 DJ Mediaprint 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 DJ Mediaprint Logistics, you can compare the effects of market volatilities on ADF Foods and DJ Mediaprint 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 DJ Mediaprint. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADF Foods and DJ Mediaprint.

Diversification Opportunities for ADF Foods and DJ Mediaprint

-0.41

Correlation Coefficient

ADF Foods  DJ Mediaprint

Very good diversification

The 3 months correlation between ADF and DJML is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding ADF Foods Limited and DJ Mediaprint Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DJ Mediaprint Logistics 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 DJ Mediaprint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DJ Mediaprint Logistics has no effect on the direction of ADF Foods i.e., ADF Foods and DJ Mediaprint go up and down completely randomly.

Pair Corralation between ADF Foods and DJ Mediaprint

Assuming the 90 days trading horizon ADF Foods Limited is expected to generate 1.16 times more return on investment than DJ Mediaprint. However, ADF Foods is 1.16 times more volatile than DJ Mediaprint Logistics. It trades about 0.1 of its potential returns per unit of risk. DJ Mediaprint Logistics is currently generating about -0.06 per unit of risk. If you would invest  23,187  in ADF Foods Limited on April 22, 2025 and sell it today you would earn a total of  4,123  from holding ADF Foods Limited or generate 17.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

ADF Foods Limited  vs.  DJ Mediaprint Logistics

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.

DJ Mediaprint Logistics

Risk-Adjusted Performance

Very Weak

Over the last 90 days DJ Mediaprint Logistics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with ADF Foods and DJ Mediaprint

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

The idea behind ADF Foods Limited and DJ Mediaprint Logistics 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.