Correlation Between Sixt Leasing and RBC Bearings
Can any of the company-specific risk be diversified away by investing in both Sixt Leasing 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 Sixt Leasing and RBC Bearings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sixt Leasing SE and RBC Bearings Incorporated, you can compare the effects of market volatilities on Sixt Leasing 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 Sixt Leasing with a short position of RBC Bearings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sixt Leasing and RBC Bearings.
Diversification Opportunities for Sixt Leasing and RBC Bearings
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sixt and RBC is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Sixt Leasing SE and RBC Bearings Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Bearings and Sixt Leasing 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 Sixt Leasing SE 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 Sixt Leasing i.e., Sixt Leasing and RBC Bearings go up and down completely randomly.
Pair Corralation between Sixt Leasing and RBC Bearings
Assuming the 90 days trading horizon Sixt Leasing SE is expected to under-perform the RBC Bearings. But the stock apears to be less risky and, when comparing its historical volatility, Sixt Leasing SE is 1.05 times less risky than RBC Bearings. The stock trades about -0.06 of its potential returns per unit of risk. The 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 Against |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Sixt Leasing SE vs. RBC Bearings Incorporated
Performance |
| Timeline |
| Sixt Leasing SE |
| RBC Bearings |
Sixt Leasing and RBC Bearings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sixt Leasing and RBC Bearings
The main advantage of trading using opposite Sixt Leasing and RBC Bearings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sixt Leasing 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.| Sixt Leasing vs. Apple Inc | Sixt Leasing vs. Apple Inc | Sixt Leasing vs. Apple Inc | Sixt Leasing vs. Apple Inc |
| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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