Correlation Between Osia Hyper and ADF Foods

Can any of the company-specific risk be diversified away by investing in both Osia Hyper and ADF Foods 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 Osia Hyper and ADF Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Osia Hyper Retail and ADF Foods Limited, you can compare the effects of market volatilities on Osia Hyper 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 Osia Hyper with a short position of ADF Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osia Hyper and ADF Foods.

Diversification Opportunities for Osia Hyper and ADF Foods

0.8

Correlation Coefficient

Osia Hyper  ADF Foods

Very poor diversification

The 3 months correlation between Osia and ADF is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Osia Hyper Retail 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 Osia Hyper 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 Osia Hyper Retail 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 Osia Hyper i.e., Osia Hyper and ADF Foods go up and down completely randomly.

Pair Corralation between Osia Hyper and ADF Foods

Assuming the 90 days trading horizon Osia Hyper Retail is expected to generate 1.13 times more return on investment than ADF Foods. However, Osia Hyper is 1.13 times more volatile than ADF Foods Limited. It trades about -0.04 of its potential returns per unit of risk. ADF Foods Limited is currently generating about -0.08 per unit of risk. If you would invest  2,833  in Osia Hyper Retail on December 30, 2024 and sell it today you would lose (351.00) from holding Osia Hyper Retail or give up 12.39% of portfolio value over 90 days.

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

Osia Hyper Retail  vs.  ADF Foods Limited

Osia Hyper Retail

Risk-Adjusted Performance

Very Weak

Over the last 90 days Osia Hyper Retail has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

ADF Foods Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days ADF Foods Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Osia Hyper and ADF Foods

The main advantage of trading using opposite Osia Hyper and ADF Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Osia Hyper 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.

The idea behind Osia Hyper Retail and ADF Foods Limited 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.