Correlation Between Worthington Steel and RCL Foods

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

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

Diversification Opportunities for Worthington Steel and RCL Foods

-0.12

Correlation Coefficient

Worthington Steel  RCL Foods

Good diversification

The 3 months correlation between Worthington and RCL is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Worthington Steel and RCL Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCL Foods Limited and Worthington Steel 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 Worthington Steel are associated (or correlated) with RCL Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCL Foods Limited has no effect on the direction of Worthington Steel i.e., Worthington Steel and RCL Foods go up and down completely randomly.

Pair Corralation between Worthington Steel and RCL Foods

Allowing for the 90-day total investment horizon Worthington Steel is expected to generate 8.28 times less return on investment than RCL Foods. But when comparing it to its historical volatility, Worthington Steel is 2.99 times less risky than RCL Foods. It trades about 0.05 of its potential returns per unit of risk. RCL Foods Limited is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  33.00  in RCL Foods Limited on August 5, 2025 and sell it today you would earn a total of  24.00  from holding RCL Foods Limited or generate 72.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Worthington Steel  vs.  RCL Foods Limited

Worthington Steel

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Worthington Steel are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Worthington Steel may actually be approaching a critical reversion point that can send shares even higher in December 2025.

RCL Foods Limited

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in RCL Foods Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, RCL Foods reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Worthington Steel and RCL Foods

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

The idea behind Worthington Steel and RCL Foods Limited 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.