Correlation Between Rubicon Organics and Altiplano Metals

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

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

Diversification Opportunities for Rubicon Organics and Altiplano Metals

0.13

Correlation Coefficient

Rubicon Organics  Altiplano Metals

Average diversification

The 3 months correlation between Rubicon and Altiplano is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Rubicon Organics and Altiplano Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altiplano Metals and Rubicon Organics 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 Rubicon Organics are associated (or correlated) with Altiplano Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altiplano Metals has no effect on the direction of Rubicon Organics i.e., Rubicon Organics and Altiplano Metals go up and down completely randomly.

Pair Corralation between Rubicon Organics and Altiplano Metals

Assuming the 90 days trading horizon Rubicon Organics is expected to generate 0.7 times more return on investment than Altiplano Metals. However, Rubicon Organics is 1.42 times less risky than Altiplano Metals. It trades about 0.08 of its potential returns per unit of risk. Altiplano Metals is currently generating about -0.05 per unit of risk. If you would invest  41.00  in Rubicon Organics on October 4, 2024 and sell it today you would earn a total of  7.00  from holding Rubicon Organics or generate 17.07% return on investment over 90 days.

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

Rubicon Organics  vs.  Altiplano Metals

Rubicon Organics

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Rubicon Organics are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, Rubicon Organics showed solid returns over the last few months and may actually be approaching a breakup point.

Altiplano Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altiplano Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Rubicon Organics and Altiplano Metals

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

The idea behind Rubicon Organics and Altiplano Metals 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.