Correlation Between Rubicon Organics and StateHouse Holdings

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

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

Diversification Opportunities for Rubicon Organics and StateHouse Holdings

0.0

Correlation Coefficient

Rubicon Organics  StateHouse Holdings

Pay attention - limited upside

The 3 months correlation between Rubicon and StateHouse is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Rubicon Organics and StateHouse Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StateHouse Holdings 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 StateHouse Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StateHouse Holdings has no effect on the direction of Rubicon Organics i.e., Rubicon Organics and StateHouse Holdings go up and down completely randomly.

Pair Corralation between Rubicon Organics and StateHouse Holdings

If you would invest  34.00  in Rubicon Organics on December 28, 2024 and sell it today you would earn a total of  4.00  from holding Rubicon Organics or generate 11.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Rubicon Organics  vs.  StateHouse Holdings

Rubicon Organics

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Rubicon Organics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking indicators, Rubicon Organics reported solid returns over the last few months and may actually be approaching a breakup point.

StateHouse Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days StateHouse Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, StateHouse Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Rubicon Organics and StateHouse Holdings

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

The idea behind Rubicon Organics and StateHouse Holdings 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.