Correlation Between RB FOOD and CHAOSUA FOODS

Can any of the company-specific risk be diversified away by investing in both RB FOOD and CHAOSUA FOODS 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 CHAOSUA FOODS 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 CHAOSUA FOODS INDUSTRY, you can compare the effects of market volatilities on RB FOOD and CHAOSUA FOODS 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 CHAOSUA FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of RB FOOD and CHAOSUA FOODS.

Diversification Opportunities for RB FOOD and CHAOSUA FOODS

0.4

Correlation Coefficient

RB FOOD  CHAOSUA FOODS

Very weak diversification

The 3 months correlation between RBF-R and CHAOSUA is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding RB FOOD SUPPLY and CHAOSUA FOODS INDUSTRY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHAOSUA FOODS INDUSTRY 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 CHAOSUA FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHAOSUA FOODS INDUSTRY has no effect on the direction of RB FOOD i.e., RB FOOD and CHAOSUA FOODS go up and down completely randomly.

Pair Corralation between RB FOOD and CHAOSUA FOODS

Assuming the 90 days trading horizon RB FOOD SUPPLY is expected to under-perform the CHAOSUA FOODS. In addition to that, RB FOOD is 2.2 times more volatile than CHAOSUA FOODS INDUSTRY. It trades about -0.04 of its total potential returns per unit of risk. CHAOSUA FOODS INDUSTRY is currently generating about -0.07 per unit of volatility. If you would invest  567.00  in CHAOSUA FOODS INDUSTRY on April 24, 2025 and sell it today you would lose (52.00) from holding CHAOSUA FOODS INDUSTRY or give up 9.17% of portfolio value over 90 days.

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

RB FOOD SUPPLY  vs.  CHAOSUA FOODS INDUSTRY

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 latest conflicting performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

CHAOSUA FOODS INDUSTRY

Risk-Adjusted Performance

Very Weak

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

Pair Trading with RB FOOD and CHAOSUA FOODS

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

The idea behind RB FOOD SUPPLY and CHAOSUA FOODS INDUSTRY 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.