Correlation Between First Foods and DATA Communications

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

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

Diversification Opportunities for First Foods and DATA Communications

0.0

Correlation Coefficient

First Foods  DATA Communications

Pay attention - limited upside

The 3 months correlation between First and DATA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Foods Group and DATA Communications Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATA Communications and First 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 First Foods Group are associated (or correlated) with DATA Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATA Communications has no effect on the direction of First Foods i.e., First Foods and DATA Communications go up and down completely randomly.

Pair Corralation between First Foods and DATA Communications

If you would invest (100.00) in First Foods Group on May 13, 2025 and sell it today you would earn a total of  100.00  from holding First Foods Group or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

First Foods Group  vs.  DATA Communications Management

First Foods Group

Risk-Adjusted Performance

Weakest

Over the last 90 days First Foods Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, First Foods is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

DATA Communications

Risk-Adjusted Performance

Weakest

Over the last 90 days DATA Communications Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with First Foods and DATA Communications

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

The idea behind First Foods Group and DATA Communications Management 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.