Correlation Between ADF and Imaflex

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

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

Diversification Opportunities for ADF and Imaflex

-0.18

Correlation Coefficient

ADF  Imaflex

Good diversification

The 3 months correlation between ADF and Imaflex is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding ADF Group and Imaflex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imaflex and ADF 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 Group are associated (or correlated) with Imaflex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imaflex has no effect on the direction of ADF i.e., ADF and Imaflex go up and down completely randomly.

Pair Corralation between ADF and Imaflex

Assuming the 90 days trading horizon ADF Group is expected to generate 2.45 times more return on investment than Imaflex. However, ADF is 2.45 times more volatile than Imaflex. It trades about 0.07 of its potential returns per unit of risk. Imaflex is currently generating about 0.06 per unit of risk. If you would invest  764.00  in ADF Group on May 16, 2025 and sell it today you would earn a total of  120.00  from holding ADF Group or generate 15.71% return on investment over 90 days.

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

ADF Group  vs.  Imaflex

ADF Group

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in ADF Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, ADF displayed solid returns over the last few months and may actually be approaching a breakup point.

Imaflex

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Imaflex are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Imaflex may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with ADF and Imaflex

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

The idea behind ADF Group and Imaflex 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 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.