Correlation Between RB Food and Winner Group

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

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

Diversification Opportunities for RB Food and Winner Group

-0.78

Correlation Coefficient

RB Food  Winner Group

Pay attention - limited upside

The 3 months correlation between RBF and Winner is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding RB Food Supply and Winner Group Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winner Group Enterprise and RB 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 RB Food Supply are associated (or correlated) with Winner Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winner Group Enterprise has no effect on the direction of RB Food i.e., RB Food and Winner Group go up and down completely randomly.

Pair Corralation between RB Food and Winner Group

Assuming the 90 days trading horizon RB Food Supply is expected to under-perform the Winner Group. In addition to that, RB Food is 4.85 times more volatile than Winner Group Enterprise. It trades about -0.05 of its total potential returns per unit of risk. Winner Group Enterprise is currently generating about -0.13 per unit of volatility. If you would invest  204.00  in Winner Group Enterprise on October 12, 2024 and sell it today you would lose (4.00) from holding Winner Group Enterprise or give up 1.96% of portfolio value over 90 days.

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

RB Food Supply  vs.  Winner Group Enterprise

RB Food Supply

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in RB Food Supply are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical and fundamental indicators, RB Food disclosed solid returns over the last few months and may actually be approaching a breakup point.

Winner Group Enterprise

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Winner Group Enterprise has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Winner Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with RB Food and Winner Group

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

The idea behind RB Food Supply and Winner Group Enterprise 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 Commodity Directory module to find actively traded commodities issued by global exchanges.