Correlation Between Rubicon Organics and Auxly Cannabis

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Can any of the company-specific risk be diversified away by investing in both Rubicon Organics and Auxly Cannabis 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 Auxly Cannabis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rubicon Organics and Auxly Cannabis Group, you can compare the effects of market volatilities on Rubicon Organics and Auxly Cannabis 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 Auxly Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rubicon Organics and Auxly Cannabis.

Diversification Opportunities for Rubicon Organics and Auxly Cannabis

-0.12
  Correlation Coefficient

Good diversification

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

Pair Corralation between Rubicon Organics and Auxly Cannabis

Assuming the 90 days trading horizon Rubicon Organics is expected to generate 1.09 times more return on investment than Auxly Cannabis. However, Rubicon Organics is 1.09 times more volatile than Auxly Cannabis Group. It trades about 0.15 of its potential returns per unit of risk. Auxly Cannabis Group is currently generating about -0.08 per unit of risk. If you would invest  36.00  in Rubicon Organics on September 21, 2024 and sell it today you would earn a total of  7.00  from holding Rubicon Organics or generate 19.44% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.65%
ValuesDaily Returns

Rubicon Organics  vs.  Auxly Cannabis Group

 Performance 
       Timeline  
Rubicon Organics 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
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 January 2025.
Auxly Cannabis Group 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Auxly Cannabis Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Auxly Cannabis may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Rubicon Organics and Auxly Cannabis Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Rubicon Organics and Auxly Cannabis

The main advantage of trading using opposite Rubicon Organics and Auxly Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rubicon Organics position performs unexpectedly, Auxly Cannabis 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 Auxly Cannabis will offset losses from the drop in Auxly Cannabis' long position.
The idea behind Rubicon Organics and Auxly Cannabis Group 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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