Correlation Between Ximen Mining and Rubicon Organics

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

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

Diversification Opportunities for Ximen Mining and Rubicon Organics

0.24

Correlation Coefficient

Ximen Mining  Rubicon Organics

Modest diversification

The 3 months correlation between Ximen and Rubicon is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ximen Mining Corp and Rubicon Organics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubicon Organics and Ximen Mining 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 Ximen Mining Corp are associated (or correlated) with Rubicon Organics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubicon Organics has no effect on the direction of Ximen Mining i.e., Ximen Mining and Rubicon Organics go up and down completely randomly.

Pair Corralation between Ximen Mining and Rubicon Organics

Assuming the 90 days horizon Ximen Mining Corp is expected to generate 1.53 times more return on investment than Rubicon Organics. However, Ximen Mining is 1.53 times more volatile than Rubicon Organics. It trades about 0.18 of its potential returns per unit of risk. Rubicon Organics is currently generating about 0.07 per unit of risk. If you would invest  7.50  in Ximen Mining Corp on December 23, 2024 and sell it today you would earn a total of  8.50  from holding Ximen Mining Corp or generate 113.33% return on investment over 90 days.

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

Ximen Mining Corp  vs.  Rubicon Organics

Ximen Mining Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ximen Mining Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Ximen Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Rubicon Organics

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Rubicon Organics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal primary indicators, Rubicon Organics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ximen Mining and Rubicon Organics

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

The idea behind Ximen Mining Corp and Rubicon Organics 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.