Correlation Between Rubicon Organics and Avant Brands

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

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

Diversification Opportunities for Rubicon Organics and Avant Brands

0.32

Correlation Coefficient

Rubicon Organics  Avant Brands

Weak diversification

The 3 months correlation between Rubicon and Avant is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Rubicon Organics and Avant Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avant Brands 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 Avant Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avant Brands has no effect on the direction of Rubicon Organics i.e., Rubicon Organics and Avant Brands go up and down completely randomly.

Pair Corralation between Rubicon Organics and Avant Brands

Assuming the 90 days trading horizon Rubicon Organics is expected to generate 0.72 times more return on investment than Avant Brands. However, Rubicon Organics is 1.38 times less risky than Avant Brands. It trades about -0.01 of its potential returns per unit of risk. Avant Brands is currently generating about -0.1 per unit of risk. If you would invest  47.00  in Rubicon Organics on April 23, 2025 and sell it today you would lose (3.00) from holding Rubicon Organics or give up 6.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Rubicon Organics  vs.  Avant Brands

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.

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.

Pair Trading with Rubicon Organics and Avant Brands

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

The idea behind Rubicon Organics and Avant Brands 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.