Correlation Between Gildan Activewear and Rubicon Organics
Can any of the company-specific risk be diversified away by investing in both Gildan Activewear and Rubicon Organics 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 Gildan Activewear and Rubicon Organics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gildan Activewear and Rubicon Organics, you can compare the effects of market volatilities on Gildan Activewear and Rubicon Organics 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 Gildan Activewear with a short position of Rubicon Organics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gildan Activewear and Rubicon Organics.
Diversification Opportunities for Gildan Activewear and Rubicon Organics
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gildan and Rubicon is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Gildan Activewear and Rubicon Organics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubicon Organics and Gildan Activewear 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 Gildan Activewear are associated (or correlated) with Rubicon Organics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubicon Organics has no effect on the direction of Gildan Activewear i.e., Gildan Activewear and Rubicon Organics go up and down completely randomly.
Pair Corralation between Gildan Activewear and Rubicon Organics
Assuming the 90 days trading horizon Gildan Activewear is expected to generate 0.1 times more return on investment than Rubicon Organics. However, Gildan Activewear is 9.78 times less risky than Rubicon Organics. It trades about 0.02 of its potential returns per unit of risk. Rubicon Organics is currently generating about 0.0 per unit of risk. If you would invest 6,921 in Gildan Activewear on September 6, 2024 and sell it today you would earn a total of 22.00 from holding Gildan Activewear or generate 0.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gildan Activewear vs. Rubicon Organics
Performance |
| Timeline |
| Gildan Activewear |
| Rubicon Organics |
Gildan Activewear and Rubicon Organics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gildan Activewear and Rubicon Organics
The main advantage of trading using opposite Gildan Activewear and Rubicon Organics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gildan Activewear position performs unexpectedly, Rubicon Organics 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 Rubicon Organics will offset losses from the drop in Rubicon Organics' long position.| Gildan Activewear vs. Saputo Inc | Gildan Activewear vs. CCL Industries | Gildan Activewear vs. Thomson Reuters Corp | Gildan Activewear vs. George Weston Limited |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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