Correlation Between Rubicon Organics and IShares Fundamental

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

By analyzing existing cross correlation between Rubicon Organics and iShares Fundamental Hedged, you can compare the effects of market volatilities on Rubicon Organics and IShares Fundamental 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 IShares Fundamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rubicon Organics and IShares Fundamental.

Diversification Opportunities for Rubicon Organics and IShares Fundamental

-0.72

Correlation Coefficient

Rubicon Organics  IShares Fundamental

Pay attention - limited upside

The 3 months correlation between Rubicon and IShares is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Rubicon Organics and iShares Fundamental Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Fundamental 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 IShares Fundamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Fundamental has no effect on the direction of Rubicon Organics i.e., Rubicon Organics and IShares Fundamental go up and down completely randomly.

Pair Corralation between Rubicon Organics and IShares Fundamental

Assuming the 90 days trading horizon Rubicon Organics is expected to generate 9.49 times more return on investment than IShares Fundamental. However, Rubicon Organics is 9.49 times more volatile than iShares Fundamental Hedged. It trades about 0.02 of its potential returns per unit of risk. iShares Fundamental Hedged is currently generating about 0.09 per unit of risk. If you would invest  46.00  in Rubicon Organics on October 22, 2024 and sell it today you would lose (7.00) from holding Rubicon Organics or give up 15.22% of portfolio value over 90 days.

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

Rubicon Organics  vs.  iShares Fundamental Hedged

Rubicon Organics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Rubicon Organics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal primary indicators, Rubicon Organics may actually be approaching a critical reversion point that can send shares even higher in February 2025.

iShares Fundamental

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Fundamental Hedged are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, IShares Fundamental is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Rubicon Organics and IShares Fundamental

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

The idea behind Rubicon Organics and iShares Fundamental Hedged 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.