Correlation Between ADF Foods and Datamatics Global

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

Diversification Opportunities for ADF Foods and Datamatics Global

-0.44

Correlation Coefficient

ADF Foods  Datamatics Global

Very good diversification

The 3 months correlation between ADF and Datamatics is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding ADF Foods Limited and Datamatics Global Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datamatics Global 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 Datamatics Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datamatics Global has no effect on the direction of ADF Foods i.e., ADF Foods and Datamatics Global go up and down completely randomly.

Pair Corralation between ADF Foods and Datamatics Global

Assuming the 90 days trading horizon ADF Foods is expected to generate 20.22 times less return on investment than Datamatics Global. But when comparing it to its historical volatility, ADF Foods Limited is 1.07 times less risky than Datamatics Global. It trades about 0.01 of its potential returns per unit of risk. Datamatics Global Services is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  61,125  in Datamatics Global Services on May 22, 2025 and sell it today you would earn a total of  30,360  from holding Datamatics Global Services or generate 49.67% 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.  Datamatics Global Services

ADF Foods Limited

Risk-Adjusted Performance

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 rather sound basic indicators, ADF Foods is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Datamatics Global

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Datamatics Global Services are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating forward indicators, Datamatics Global unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ADF Foods and Datamatics Global

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

The idea behind ADF Foods Limited and Datamatics Global Services 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.