Correlation Between PHN Multi and Rubicon Organics

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

By analyzing existing cross correlation between PHN Multi Style All Cap and Rubicon Organics, you can compare the effects of market volatilities on PHN Multi and Rubicon Organics 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 PHN Multi with a short position of Rubicon Organics. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHN Multi and Rubicon Organics.

Diversification Opportunities for PHN Multi and Rubicon Organics

-0.87

Correlation Coefficient

PHN Multi  Rubicon Organics

Pay attention - limited upside

The 3 months correlation between PHN and Rubicon is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding PHN Multi Style All Cap and Rubicon Organics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubicon Organics and PHN Multi 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 PHN Multi Style All Cap are associated (or correlated) with Rubicon Organics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubicon Organics has no effect on the direction of PHN Multi i.e., PHN Multi and Rubicon Organics go up and down completely randomly.

Pair Corralation between PHN Multi and Rubicon Organics

Assuming the 90 days trading horizon PHN Multi Style All Cap is expected to generate 0.15 times more return on investment than Rubicon Organics. However, PHN Multi Style All Cap is 6.51 times less risky than Rubicon Organics. It trades about 0.27 of its potential returns per unit of risk. Rubicon Organics is currently generating about -0.1 per unit of risk. If you would invest  2,572  in PHN Multi Style All Cap on August 31, 2024 and sell it today you would earn a total of  311.00  from holding PHN Multi Style All Cap or generate 12.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

PHN Multi Style All Cap  vs.  Rubicon Organics

PHN Multi Style

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PHN Multi Style All Cap are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of very weak basic indicators, PHN Multi may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Rubicon Organics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rubicon Organics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain fairly stable which may send shares a bit higher in December 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with PHN Multi and Rubicon Organics

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

The idea behind PHN Multi Style All Cap and Rubicon Organics 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.