Correlation Between RB Food and AAPICO Hitech

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

Diversification Opportunities for RB Food and AAPICO Hitech

-0.19

Correlation Coefficient

RB Food  AAPICO Hitech

Good diversification

The 3 months correlation between RBF and AAPICO is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding RB Food Supply and AAPICO Hitech Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAPICO Hitech 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 AAPICO Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAPICO Hitech Public has no effect on the direction of RB Food i.e., RB Food and AAPICO Hitech go up and down completely randomly.

Pair Corralation between RB Food and AAPICO Hitech

Assuming the 90 days trading horizon RB Food Supply is expected to under-perform the AAPICO Hitech. In addition to that, RB Food is 1.15 times more volatile than AAPICO Hitech Public. It trades about -0.02 of its total potential returns per unit of risk. AAPICO Hitech Public is currently generating about 0.19 per unit of volatility. If you would invest  1,160  in AAPICO Hitech Public on April 23, 2025 and sell it today you would earn a total of  290.00  from holding AAPICO Hitech Public or generate 25.0% 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.  AAPICO Hitech 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 quite persistent technical and fundamental indicators, RB Food is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

AAPICO Hitech Public

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AAPICO Hitech Public are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, AAPICO Hitech disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RB Food and AAPICO Hitech

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

The idea behind RB Food Supply and AAPICO Hitech 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.

Check out your portfolio center.

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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.