Correlation Between Rio2 and Benchmark Botanics

Can any of the company-specific risk be diversified away by investing in both Rio2 and Benchmark Botanics 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 Rio2 and Benchmark Botanics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Rio2 and Benchmark Botanics, you can compare the effects of market volatilities on Rio2 and Benchmark Botanics 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 Rio2 with a short position of Benchmark Botanics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rio2 and Benchmark Botanics.

Diversification Opportunities for Rio2 and Benchmark Botanics

0.0

Correlation Coefficient

Rio2  Benchmark Botanics

Pay attention - limited upside

The 3 months correlation between Rio2 and Benchmark is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Rio2 and Benchmark Botanics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Botanics and Rio2 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 Rio2 are associated (or correlated) with Benchmark Botanics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benchmark Botanics has no effect on the direction of Rio2 i.e., Rio2 and Benchmark Botanics go up and down completely randomly.

Pair Corralation between Rio2 and Benchmark Botanics

If you would invest  183.00  in Rio2 on August 31, 2025 and sell it today you would earn a total of  67.00  from holding Rio2 or generate 36.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Rio2  vs.  Benchmark Botanics

Rio2

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Rio2 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Rio2 displayed solid returns over the last few months and may actually be approaching a breakup point.

Benchmark Botanics

Risk-Adjusted Performance

Weakest

Over the last 90 days Benchmark Botanics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, Benchmark Botanics is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Rio2 and Benchmark Botanics

The main advantage of trading using opposite Rio2 and Benchmark Botanics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rio2 position performs unexpectedly, Benchmark Botanics 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 Benchmark Botanics will offset losses from the drop in Benchmark Botanics' long position.

The idea behind Rio2 and Benchmark Botanics 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 Stocks Directory module to find actively traded stocks across global markets.