Correlation Between Helix Acquisition and RBC Bearings
Can any of the company-specific risk be diversified away by investing in both Helix Acquisition 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 Helix Acquisition and RBC Bearings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Helix Acquisition Corp and RBC Bearings Incorporated, you can compare the effects of market volatilities on Helix Acquisition 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 Helix Acquisition with a short position of RBC Bearings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helix Acquisition and RBC Bearings.
Diversification Opportunities for Helix Acquisition and RBC Bearings
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Helix and RBC is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Helix Acquisition Corp and RBC Bearings Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Bearings and Helix Acquisition 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 Helix Acquisition Corp 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 Helix Acquisition i.e., Helix Acquisition and RBC Bearings go up and down completely randomly.
Pair Corralation between Helix Acquisition and RBC Bearings
Given the investment horizon of 90 days Helix Acquisition Corp is expected to under-perform the RBC Bearings. But the stock apears to be less risky and, when comparing its historical volatility, Helix Acquisition Corp is 3.68 times less risky than RBC Bearings. The stock trades about -0.03 of its potential returns per unit of risk. The RBC Bearings Incorporated is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 28,583 in RBC Bearings Incorporated on August 30, 2024 and sell it today you would earn a total of 5,383 from holding RBC Bearings Incorporated or generate 18.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Helix Acquisition Corp vs. RBC Bearings Incorporated
Performance |
| Timeline |
| Helix Acquisition Corp |
| RBC Bearings |
Helix Acquisition and RBC Bearings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Helix Acquisition and RBC Bearings
The main advantage of trading using opposite Helix Acquisition and RBC Bearings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helix Acquisition 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.| Helix Acquisition vs. SBM Offshore NV | Helix Acquisition vs. Brunswick | Helix Acquisition vs. Cars Inc | Helix Acquisition vs. Li Auto |
| RBC Bearings vs. Lincoln Electric Holdings | RBC Bearings vs. Kennametal | RBC Bearings vs. Toro Co | RBC Bearings vs. Snap On |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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