Correlation Between RB FOOD and Thai Oil

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

Diversification Opportunities for RB FOOD and Thai Oil

-0.25

Correlation Coefficient

RB FOOD  Thai Oil

Very good diversification

The 3 months correlation between RBF-R and Thai is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding RB FOOD SUPPLY and Thai Oil Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Oil Public 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 Thai Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Oil Public has no effect on the direction of RB FOOD i.e., RB FOOD and Thai Oil go up and down completely randomly.

Pair Corralation between RB FOOD and Thai Oil

Assuming the 90 days trading horizon RB FOOD SUPPLY is expected to under-perform the Thai Oil. In addition to that, RB FOOD is 1.81 times more volatile than Thai Oil Public. It trades about -0.03 of its total potential returns per unit of risk. Thai Oil Public is currently generating about 0.18 per unit of volatility. If you would invest  2,480  in Thai Oil Public on April 23, 2025 and sell it today you would earn a total of  670.00  from holding Thai Oil Public or generate 27.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

RB FOOD SUPPLY  vs.  Thai Oil Public

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.

Thai Oil Public

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Thai Oil Public are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Thai Oil disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RB FOOD and Thai Oil

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

The idea behind RB FOOD SUPPLY and Thai Oil Public 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.