Correlation Between ERShares Entrepreneurs and Rubicon Technology

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

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

Diversification Opportunities for ERShares Entrepreneurs and Rubicon Technology

-0.07

Correlation Coefficient

ERShares Entrepreneurs  Rubicon Technology

Good diversification

The 3 months correlation between ERShares and Rubicon is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding ERShares Entrepreneurs ETF and Rubicon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubicon Technology and ERShares Entrepreneurs 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 ERShares Entrepreneurs ETF are associated (or correlated) with Rubicon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubicon Technology has no effect on the direction of ERShares Entrepreneurs i.e., ERShares Entrepreneurs and Rubicon Technology go up and down completely randomly.

Pair Corralation between ERShares Entrepreneurs and Rubicon Technology

If you would invest  157.00  in Rubicon Technology on September 27, 2024 and sell it today you would earn a total of  0.00  from holding Rubicon Technology or generate 0.0% return on investment over 90 days.

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

ERShares Entrepreneurs ETF  vs.  Rubicon Technology

ERShares Entrepreneurs

Risk-Adjusted Performance

0 of 100

Very Weak

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

Rubicon Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rubicon Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Rubicon Technology is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with ERShares Entrepreneurs and Rubicon Technology

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

The idea behind ERShares Entrepreneurs ETF and Rubicon Technology 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.