Correlation Between Davis Commodities and CHS

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

By analyzing existing cross correlation between Davis Commodities Limited and CHS Inc CP, you can compare the effects of market volatilities on Davis Commodities and CHS 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 Davis Commodities with a short position of CHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Davis Commodities and CHS.

Diversification Opportunities for Davis Commodities and CHS

-0.01

Correlation Coefficient

Davis Commodities  CHS

Good diversification

The 3 months correlation between Davis and CHS is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Davis Commodities Limited and CHS Inc CP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHS Inc CP and Davis Commodities 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 Davis Commodities Limited are associated (or correlated) with CHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHS Inc CP has no effect on the direction of Davis Commodities i.e., Davis Commodities and CHS go up and down completely randomly.

Pair Corralation between Davis Commodities and CHS

Given the investment horizon of 90 days Davis Commodities Limited is expected to generate 28.26 times more return on investment than CHS. However, Davis Commodities is 28.26 times more volatile than CHS Inc CP. It trades about 0.04 of its potential returns per unit of risk. CHS Inc CP is currently generating about -0.12 per unit of risk. If you would invest  89.00  in Davis Commodities Limited on September 12, 2025 and sell it today you would lose (53.00) from holding Davis Commodities Limited or give up 59.55% of portfolio value over 90 days.

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

Davis Commodities Limited  vs.  CHS Inc CP

Davis Commodities

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Davis Commodities Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental indicators, Davis Commodities disclosed solid returns over the last few months and may actually be approaching a breakup point.

CHS Inc CP

Risk-Adjusted Performance

Weakest

Over the last 90 days CHS Inc CP has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, CHS is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Davis Commodities and CHS

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

The idea behind Davis Commodities Limited and CHS Inc CP 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.