Correlation Between Where Food and Automatic Data

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

By analyzing existing cross correlation between Where Food Comes and Automatic Data Processing, you can compare the effects of market volatilities on Where Food and Automatic Data 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 Where Food with a short position of Automatic Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Where Food and Automatic Data.

Diversification Opportunities for Where Food and Automatic Data

-0.81

Correlation Coefficient

Where Food  Automatic Data

Pay attention - limited upside

The 3 months correlation between Where and Automatic is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Where Food Comes and Automatic Data Processing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Data Processing and Where Food 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 Where Food Comes are associated (or correlated) with Automatic Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Data Processing has no effect on the direction of Where Food i.e., Where Food and Automatic Data go up and down completely randomly.

Pair Corralation between Where Food and Automatic Data

Given the investment horizon of 90 days Where Food Comes is expected to generate 2.36 times more return on investment than Automatic Data. However, Where Food is 2.36 times more volatile than Automatic Data Processing. It trades about 0.01 of its potential returns per unit of risk. Automatic Data Processing is currently generating about -0.09 per unit of risk. If you would invest  1,197  in Where Food Comes on July 13, 2025 and sell it today you would earn a total of  3.00  from holding Where Food Comes or generate 0.25% return on investment over 90 days.

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

Where Food Comes  vs.  Automatic Data Processing

Where Food Comes

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Where Food Comes are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Where Food is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Automatic Data Processing

Risk-Adjusted Performance

Weakest

Over the last 90 days Automatic Data Processing has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Automatic Data is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Where Food and Automatic Data

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

The idea behind Where Food Comes and Automatic Data Processing 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.