Correlation Between Rubicon Organics and Atrium Mortgage

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

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

Diversification Opportunities for Rubicon Organics and Atrium Mortgage

0.58

Correlation Coefficient

Rubicon Organics  Atrium Mortgage

Very weak diversification

The 3 months correlation between Rubicon and Atrium is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Rubicon Organics and Atrium Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atrium Mortgage Inve 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 Atrium Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atrium Mortgage Inve has no effect on the direction of Rubicon Organics i.e., Rubicon Organics and Atrium Mortgage go up and down completely randomly.

Pair Corralation between Rubicon Organics and Atrium Mortgage

Assuming the 90 days trading horizon Rubicon Organics is expected to under-perform the Atrium Mortgage. In addition to that, Rubicon Organics is 9.57 times more volatile than Atrium Mortgage Investment. It trades about -0.11 of its total potential returns per unit of risk. Atrium Mortgage Investment is currently generating about 0.13 per unit of volatility. If you would invest  1,121  in Atrium Mortgage Investment on August 30, 2024 and sell it today you would earn a total of  21.00  from holding Atrium Mortgage Investment or generate 1.87% return on investment over 90 days.

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

Rubicon Organics  vs.  Atrium Mortgage Investment

Rubicon Organics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rubicon Organics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's primary indicators remain fairly stable which may send shares a bit higher in December 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Atrium Mortgage Inve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atrium Mortgage Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Atrium Mortgage 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 Atrium Mortgage

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

The idea behind Rubicon Organics and Atrium Mortgage Investment 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.