Correlation Between FUYO GENERAL and RBC Bearings
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL 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 FUYO GENERAL and RBC Bearings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FUYO GENERAL LEASE and RBC Bearings Incorporated, you can compare the effects of market volatilities on FUYO GENERAL 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 FUYO GENERAL with a short position of RBC Bearings. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and RBC Bearings.
Diversification Opportunities for FUYO GENERAL and RBC Bearings
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FUYO and RBC is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and RBC Bearings Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Bearings and FUYO GENERAL 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 FUYO GENERAL LEASE 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 FUYO GENERAL i.e., FUYO GENERAL and RBC Bearings go up and down completely randomly.
Pair Corralation between FUYO GENERAL and RBC Bearings
Assuming the 90 days horizon FUYO GENERAL is expected to generate 6.29 times less return on investment than RBC Bearings. But when comparing it to its historical volatility, FUYO GENERAL LEASE is 1.32 times less risky than RBC Bearings. It trades about 0.04 of its potential returns per unit of risk. RBC Bearings Incorporated is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 25,600 in RBC Bearings Incorporated on September 12, 2024 and sell it today you would earn a total of 6,000 from holding RBC Bearings Incorporated or generate 23.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. RBC Bearings Incorporated
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| RBC Bearings |
FUYO GENERAL and RBC Bearings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and RBC Bearings
The main advantage of trading using opposite FUYO GENERAL and RBC Bearings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL 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.| FUYO GENERAL vs. United Rentals | FUYO GENERAL vs. WillScot Mobile Mini | FUYO GENERAL vs. Superior Plus Corp | FUYO GENERAL vs. SIVERS SEMICONDUCTORS AB |
| RBC Bearings vs. ADRIATIC METALS LS 013355 | RBC Bearings vs. LION ONE METALS | RBC Bearings vs. Zijin Mining Group | RBC Bearings vs. Perseus Mining 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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