Correlation Between National CineMedia and RBC Bearings
Can any of the company-specific risk be diversified away by investing in both National CineMedia 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 National CineMedia and RBC Bearings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and RBC Bearings Incorporated, you can compare the effects of market volatilities on National CineMedia 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 National CineMedia with a short position of RBC Bearings. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and RBC Bearings.
Diversification Opportunities for National CineMedia and RBC Bearings
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and RBC is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and RBC Bearings Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Bearings and National CineMedia 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 National CineMedia 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 National CineMedia i.e., National CineMedia and RBC Bearings go up and down completely randomly.
Pair Corralation between National CineMedia and RBC Bearings
Given the investment horizon of 90 days National CineMedia is expected to generate 30.73 times less return on investment than RBC Bearings. In addition to that, National CineMedia is 1.3 times more volatile than RBC Bearings Incorporated. It trades about 0.0 of its total potential returns per unit of risk. RBC Bearings Incorporated is currently generating about 0.13 per unit of volatility. If you would invest 29,499 in RBC Bearings Incorporated on August 25, 2024 and sell it today you would earn a total of 4,183 from holding RBC Bearings Incorporated or generate 14.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National CineMedia vs. RBC Bearings Incorporated
Performance |
| Timeline |
| National CineMedia |
| RBC Bearings |
National CineMedia and RBC Bearings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and RBC Bearings
The main advantage of trading using opposite National CineMedia and RBC Bearings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia 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.| National CineMedia vs. MGO Global Common | National CineMedia vs. Baosheng Media Group | National CineMedia vs. Impact Fusion International | National CineMedia vs. ZW Data Action |
| 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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