Correlation Between Eastern and RBC Bearings
Can any of the company-specific risk be diversified away by investing in both Eastern 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 Eastern and RBC Bearings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Co and RBC Bearings, you can compare the effects of market volatilities on Eastern 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 Eastern with a short position of RBC Bearings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern and RBC Bearings.
Diversification Opportunities for Eastern and RBC Bearings
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eastern and RBC is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Co and RBC Bearings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Bearings and Eastern 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 Eastern Co 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 Eastern i.e., Eastern and RBC Bearings go up and down completely randomly.
Pair Corralation between Eastern and RBC Bearings
If you would invest 2,759 in Eastern Co on October 21, 2024 and sell it today you would earn a total of 11.00 from holding Eastern Co or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
Eastern Co vs. RBC Bearings
Performance |
| Timeline |
| Eastern |
| RBC Bearings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Eastern and RBC Bearings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern and RBC Bearings
The main advantage of trading using opposite Eastern and RBC Bearings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern 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.| Eastern vs. Timken Company | Eastern vs. Lincoln Electric Holdings | Eastern vs. Hillman Solutions Corp | Eastern vs. AB SKF |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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