Correlation Between Rubicon Organics and Brookfield

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

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

Diversification Opportunities for Rubicon Organics and Brookfield

-0.56

Correlation Coefficient

Rubicon Organics  Brookfield

Excellent diversification

The 3 months correlation between Rubicon and Brookfield is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Rubicon Organics and Brookfield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield 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 Brookfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield has no effect on the direction of Rubicon Organics i.e., Rubicon Organics and Brookfield go up and down completely randomly.

Pair Corralation between Rubicon Organics and Brookfield

Assuming the 90 days trading horizon Rubicon Organics is expected to generate 5.73 times more return on investment than Brookfield. However, Rubicon Organics is 5.73 times more volatile than Brookfield. It trades about 0.02 of its potential returns per unit of risk. Brookfield is currently generating about 0.08 per unit of risk. If you would invest  49.00  in Rubicon Organics on March 26, 2025 and sell it today you would lose (8.00) from holding Rubicon Organics or give up 16.33% of portfolio value over 90 days.

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

Rubicon Organics  vs.  Brookfield

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 abnormal performance in the last few months, the Stock's primary indicators remain fairly stable which may send shares a bit higher in July 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Brookfield

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Brookfield is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Rubicon Organics and Brookfield

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

The idea behind Rubicon Organics and Brookfield 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.