Correlation Between Bank of America and RBC Bearings
Can any of the company-specific risk be diversified away by investing in both Bank of America and RBC Bearings 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 Bank of America and RBC Bearings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and RBC Bearings, you can compare the effects of market volatilities on Bank of America and RBC Bearings 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 Bank of America with a short position of RBC Bearings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and RBC Bearings.
Diversification Opportunities for Bank of America and RBC Bearings
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bank and RBC is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and RBC Bearings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Bearings and Bank of America 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 Bank of America are associated (or correlated) with RBC Bearings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Bearings has no effect on the direction of Bank of America i.e., Bank of America and RBC Bearings go up and down completely randomly.
Pair Corralation between Bank of America and RBC Bearings
If you would invest 4,253 in Bank of America on August 30, 2024 and sell it today you would earn a total of 524.00 from holding Bank of America or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Bank of America vs. RBC Bearings
Performance |
| Timeline |
| Bank of America |
| RBC Bearings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of America and RBC Bearings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and RBC Bearings
The main advantage of trading using opposite Bank of America and RBC Bearings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, RBC Bearings 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 RBC Bearings will offset losses from the drop in RBC Bearings' long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings |
| RBC Bearings vs. Old National Bancorp | RBC Bearings vs. Pinnacle Financial Partners | RBC Bearings vs. CIT Group Preferred | RBC Bearings vs. Texas Capital Bancshares |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |