Correlation Between Global X and Rubicon Organics
Can any of the company-specific risk be diversified away by investing in both Global X 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 Global X and Rubicon Organics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Active and Rubicon Organics, you can compare the effects of market volatilities on Global X 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 Global X with a short position of Rubicon Organics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Rubicon Organics.
Diversification Opportunities for Global X and Rubicon Organics
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Rubicon is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Global X Active and Rubicon Organics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubicon Organics and Global X 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 Global X Active 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 Global X i.e., Global X and Rubicon Organics go up and down completely randomly.
Pair Corralation between Global X and Rubicon Organics
Assuming the 90 days trading horizon Global X Active is expected to generate 0.1 times more return on investment than Rubicon Organics. However, Global X Active is 10.32 times less risky than Rubicon Organics. It trades about 0.07 of its potential returns per unit of risk. Rubicon Organics is currently generating about -0.02 per unit of risk. If you would invest 897.00 in Global X Active on September 2, 2024 and sell it today you would earn a total of 40.00 from holding Global X Active or generate 4.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Global X Active vs. Rubicon Organics
Performance |
| Timeline |
| Global X Active |
| Rubicon Organics |
Global X and Rubicon Organics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Rubicon Organics
The main advantage of trading using opposite Global X and Rubicon Organics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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.| Global X vs. BMO Covered Call | Global X vs. Forstrong Global Income | Global X vs. BMO Aggregate Bond | Global X vs. iShares Canadian HYBrid |
| Rubicon Organics vs. iShares Canadian HYBrid | Rubicon Organics vs. Altagas Cum Red | Rubicon Organics vs. European Residential Real | Rubicon Organics vs. iShares Fundamental Hedged |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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