Correlation Between Canada Goose and RBC Bearings
Can any of the company-specific risk be diversified away by investing in both Canada Goose 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 Canada Goose and RBC Bearings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canada Goose Holdings and RBC Bearings Incorporated, you can compare the effects of market volatilities on Canada Goose 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 Canada Goose with a short position of RBC Bearings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canada Goose and RBC Bearings.
Diversification Opportunities for Canada Goose and RBC Bearings
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Canada and RBC is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Canada Goose Holdings and RBC Bearings Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Bearings and Canada Goose 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 Canada Goose Holdings 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 Canada Goose i.e., Canada Goose and RBC Bearings go up and down completely randomly.
Pair Corralation between Canada Goose and RBC Bearings
Given the investment horizon of 90 days Canada Goose Holdings is expected to generate 1.65 times more return on investment than RBC Bearings. However, Canada Goose is 1.65 times more volatile than RBC Bearings Incorporated. It trades about 0.14 of its potential returns per unit of risk. RBC Bearings Incorporated is currently generating about 0.19 per unit of risk. If you would invest 939.00 in Canada Goose Holdings on September 12, 2024 and sell it today you would earn a total of 56.00 from holding Canada Goose Holdings or generate 5.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canada Goose Holdings vs. RBC Bearings Incorporated
Performance |
| Timeline |
| Canada Goose Holdings |
| RBC Bearings |
Canada Goose and RBC Bearings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canada Goose and RBC Bearings
The main advantage of trading using opposite Canada Goose and RBC Bearings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canada Goose 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.| Canada Goose vs. J Long Group Limited | Canada Goose vs. Under Armour C | Canada Goose vs. Vince Holding Corp | Canada Goose vs. Figs Inc |
| RBC Bearings vs. Kennametal | RBC Bearings vs. Snap On | RBC Bearings vs. Eastern Co | RBC Bearings vs. Lincoln Electric Holdings |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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