Correlation Between Rubicon Organics and Premium Resources

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

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

Diversification Opportunities for Rubicon Organics and Premium Resources

0.32

Correlation Coefficient

Rubicon Organics  Premium Resources

Weak diversification

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

Pair Corralation between Rubicon Organics and Premium Resources

Assuming the 90 days trading horizon Rubicon Organics is expected to under-perform the Premium Resources. But the stock apears to be less risky and, when comparing its historical volatility, Rubicon Organics is 1.67 times less risky than Premium Resources. The stock trades about -0.02 of its potential returns per unit of risk. The Premium Resources is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  870.00  in Premium Resources on April 24, 2025 and sell it today you would lose (68.00) from holding Premium Resources or give up 7.82% 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.  Premium Resources

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.

Premium Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Premium Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Premium Resources is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Rubicon Organics and Premium Resources

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

The idea behind Rubicon Organics and Premium Resources 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.