Correlation Between Avant Brands and Rubicon Organics

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

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

Diversification Opportunities for Avant Brands and Rubicon Organics

0.35

Correlation Coefficient

Avant Brands  Rubicon Organics

Weak diversification

The 3 months correlation between Avant and Rubicon is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Avant Brands and Rubicon Organics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubicon Organics and Avant Brands 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 Avant Brands 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 Avant Brands i.e., Avant Brands and Rubicon Organics go up and down completely randomly.

Pair Corralation between Avant Brands and Rubicon Organics

Assuming the 90 days trading horizon Avant Brands is expected to under-perform the Rubicon Organics. In addition to that, Avant Brands is 1.36 times more volatile than Rubicon Organics. It trades about -0.08 of its total potential returns per unit of risk. Rubicon Organics is currently generating about 0.0 per unit of volatility. If you would invest  46.00  in Rubicon Organics on April 22, 2025 and sell it today you would lose (2.00) from holding Rubicon Organics or give up 4.35% of portfolio value over 90 days.

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

Avant Brands  vs.  Rubicon Organics

Avant Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Avant Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Rubicon Organics

Risk-Adjusted Performance

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 fairly stable primary indicators, Rubicon Organics is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Avant Brands and Rubicon Organics

The main advantage of trading using opposite Avant Brands and Rubicon Organics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avant Brands 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 Avant Brands 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.