Correlation Between Rockwood Realisation and Ruffer Investment

Can any of the company-specific risk be diversified away by investing in both Rockwood Realisation and Ruffer Investment 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 Rockwood Realisation and Ruffer Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Rockwood Realisation PLC and Ruffer Investment, you can compare the effects of market volatilities on Rockwood Realisation and Ruffer Investment 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 Rockwood Realisation with a short position of Ruffer Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rockwood Realisation and Ruffer Investment.

Diversification Opportunities for Rockwood Realisation and Ruffer Investment

0.81

Correlation Coefficient

Rockwood Realisation  Ruffer Investment

Very poor diversification

The 3 months correlation between Rockwood and Ruffer is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Rockwood Realisation PLC and Ruffer Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ruffer Investment and Rockwood Realisation 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 Rockwood Realisation PLC are associated (or correlated) with Ruffer Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ruffer Investment has no effect on the direction of Rockwood Realisation i.e., Rockwood Realisation and Ruffer Investment go up and down completely randomly.

Pair Corralation between Rockwood Realisation and Ruffer Investment

Assuming the 90 days trading horizon Rockwood Realisation PLC is expected to generate 2.62 times more return on investment than Ruffer Investment. However, Rockwood Realisation is 2.62 times more volatile than Ruffer Investment. It trades about 0.46 of its potential returns per unit of risk. Ruffer Investment is currently generating about 0.07 per unit of risk. If you would invest  24,300  in Rockwood Realisation PLC on April 25, 2025 and sell it today you would earn a total of  6,300  from holding Rockwood Realisation PLC or generate 25.93% return on investment over 90 days.

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

Rockwood Realisation PLC  vs.  Ruffer Investment

Rockwood Realisation PLC

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Rockwood Realisation PLC are ranked lower than 36 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Rockwood Realisation exhibited solid returns over the last few months and may actually be approaching a breakup point.

Ruffer Investment

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ruffer Investment are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Ruffer Investment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Rockwood Realisation and Ruffer Investment

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

The idea behind Rockwood Realisation PLC and Ruffer 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.