Correlation Between VGI Public and RB FOOD

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

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

Diversification Opportunities for VGI Public and RB FOOD

0.63

Correlation Coefficient

VGI Public  RB FOOD

Poor diversification

The 3 months correlation between VGI and RBF-R is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding VGI Public and RB FOOD SUPPLY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RB FOOD SUPPLY and VGI Public 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 VGI Public are associated (or correlated) with RB FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RB FOOD SUPPLY has no effect on the direction of VGI Public i.e., VGI Public and RB FOOD go up and down completely randomly.

Pair Corralation between VGI Public and RB FOOD

Assuming the 90 days trading horizon VGI Public is expected to generate 1.24 times more return on investment than RB FOOD. However, VGI Public is 1.24 times more volatile than RB FOOD SUPPLY. It trades about -0.04 of its potential returns per unit of risk. RB FOOD SUPPLY is currently generating about -0.22 per unit of risk. If you would invest  356.00  in VGI Public on December 29, 2024 and sell it today you would lose (48.00) from holding VGI Public or give up 13.48% of portfolio value over 90 days.

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

VGI Public  vs.  RB FOOD SUPPLY

VGI Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days VGI Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

RB FOOD SUPPLY

Risk-Adjusted Performance

Very Weak

Over the last 90 days RB FOOD SUPPLY has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with VGI Public and RB FOOD

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

The idea behind VGI Public and RB FOOD SUPPLY 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..