Correlation Between Rubicon Organics and NIKE
Can any of the company-specific risk be diversified away by investing in both Rubicon Organics and NIKE 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 NIKE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rubicon Organics and NIKE Inc CDR, you can compare the effects of market volatilities on Rubicon Organics and NIKE 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 NIKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rubicon Organics and NIKE.
Diversification Opportunities for Rubicon Organics and NIKE
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Rubicon and NIKE is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Rubicon Organics and NIKE Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIKE Inc CDR 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 NIKE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIKE Inc CDR has no effect on the direction of Rubicon Organics i.e., Rubicon Organics and NIKE go up and down completely randomly.
Pair Corralation between Rubicon Organics and NIKE
Assuming the 90 days trading horizon Rubicon Organics is expected to generate 3.12 times more return on investment than NIKE. However, Rubicon Organics is 3.12 times more volatile than NIKE Inc CDR. It trades about 0.05 of its potential returns per unit of risk. NIKE Inc CDR is currently generating about -0.13 per unit of risk. If you would invest 42.00 in Rubicon Organics on September 25, 2024 and sell it today you would earn a total of 3.00 from holding Rubicon Organics or generate 7.14% 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. NIKE Inc CDR
Performance |
Timeline |
Rubicon Organics |
NIKE Inc CDR |
Rubicon Organics and NIKE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Rubicon Organics and NIKE
The main advantage of trading using opposite Rubicon Organics and NIKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rubicon Organics position performs unexpectedly, NIKE 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 NIKE will offset losses from the drop in NIKE's long position.Rubicon Organics vs. Decibel Cannabis | Rubicon Organics vs. Cannara Biotech | Rubicon Organics vs. iShares Canadian HYBrid | Rubicon Organics vs. Altagas Cum Red |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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