Correlation Between Rubicon Organics and Computer Modelling

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

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

Diversification Opportunities for Rubicon Organics and Computer Modelling

0.41

Correlation Coefficient

Rubicon Organics  Computer Modelling

Very weak diversification

The 3 months correlation between Rubicon and Computer is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Rubicon Organics and Computer Modelling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Modelling 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 Computer Modelling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Modelling has no effect on the direction of Rubicon Organics i.e., Rubicon Organics and Computer Modelling go up and down completely randomly.

Pair Corralation between Rubicon Organics and Computer Modelling

Assuming the 90 days trading horizon Rubicon Organics is expected to generate 2.15 times more return on investment than Computer Modelling. However, Rubicon Organics is 2.15 times more volatile than Computer Modelling Group. It trades about 0.08 of its potential returns per unit of risk. Computer Modelling Group is currently generating about 0.11 per unit of risk. If you would invest  42.00  in Rubicon Organics on April 21, 2025 and sell it today you would earn a total of  2.00  from holding Rubicon Organics or generate 4.76% return on investment over 90 days.

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

Rubicon Organics  vs.  Computer Modelling Group

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.

Computer Modelling

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Computer Modelling Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Computer Modelling is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Rubicon Organics and Computer Modelling

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

The idea behind Rubicon Organics and Computer Modelling Group 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.