Correlation Between Element Fleet and Rubicon Organics

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

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

Diversification Opportunities for Element Fleet and Rubicon Organics

-0.03

Correlation Coefficient

Element Fleet  Rubicon Organics

Good diversification

The 3 months correlation between Element and Rubicon is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Element Fleet Management and Rubicon Organics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubicon Organics and Element Fleet 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 Element Fleet Management 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 Element Fleet i.e., Element Fleet and Rubicon Organics go up and down completely randomly.

Pair Corralation between Element Fleet and Rubicon Organics

Assuming the 90 days trading horizon Element Fleet Management is expected to generate 0.27 times more return on investment than Rubicon Organics. However, Element Fleet Management is 3.76 times less risky than Rubicon Organics. It trades about 0.27 of its potential returns per unit of risk. Rubicon Organics is currently generating about -0.01 per unit of risk. If you would invest  3,057  in Element Fleet Management on April 23, 2025 and sell it today you would earn a total of  513.00  from holding Element Fleet Management or generate 16.78% return on investment over 90 days.

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

Element Fleet Management  vs.  Rubicon Organics

Element Fleet Management

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Element Fleet Management are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Element Fleet displayed solid returns over the last few months and may actually be approaching a breakup point.

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 Element Fleet and Rubicon Organics

The main advantage of trading using opposite Element Fleet and Rubicon Organics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Element Fleet 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 Element Fleet Management 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.