Correlation Between Rubicon Water and Jindalee Resources

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

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

Diversification Opportunities for Rubicon Water and Jindalee Resources

0.0

Correlation Coefficient

Rubicon Water  Jindalee Resources

Pay attention - limited upside

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

Pair Corralation between Rubicon Water and Jindalee Resources

If you would invest (100.00) in Jindalee Resources on October 6, 2024 and sell it today you would earn a total of  100.00  from holding Jindalee Resources or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Rubicon Water  vs.  Jindalee Resources

Rubicon Water

Risk-Adjusted Performance

6 of 100

Modest

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

Jindalee Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jindalee Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Jindalee Resources is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Rubicon Water and Jindalee Resources

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

The idea behind Rubicon Water and Jindalee Resources 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.