Correlation Between Hitachi Metals and RBC Bearings
Can any of the company-specific risk be diversified away by investing in both Hitachi Metals 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 Hitachi Metals and RBC Bearings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hitachi Metals and RBC Bearings Incorporated, you can compare the effects of market volatilities on Hitachi Metals 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 Hitachi Metals with a short position of RBC Bearings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hitachi Metals and RBC Bearings.
Diversification Opportunities for Hitachi Metals and RBC Bearings
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hitachi and RBC is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Hitachi Metals and RBC Bearings Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Bearings and Hitachi Metals 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 Hitachi Metals 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 Hitachi Metals i.e., Hitachi Metals and RBC Bearings go up and down completely randomly.
Pair Corralation between Hitachi Metals and RBC Bearings
If you would invest 28,562 in RBC Bearings Incorporated on September 2, 2024 and sell it today you would earn a total of 4,949 from holding RBC Bearings Incorporated or generate 17.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
Hitachi Metals vs. RBC Bearings Incorporated
Performance |
| Timeline |
| Hitachi Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| RBC Bearings |
Hitachi Metals and RBC Bearings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hitachi Metals and RBC Bearings
The main advantage of trading using opposite Hitachi Metals and RBC Bearings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hitachi Metals 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.| Hitachi Metals vs. BCB Bancorp | Hitachi Metals vs. Ryanair Holdings PLC | Hitachi Metals vs. Hooker Furniture | Hitachi Metals vs. Lindblad Expeditions Holdings |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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