Correlation Between RBC Bearings and Afya
Can any of the company-specific risk be diversified away by investing in both RBC Bearings and Afya 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 RBC Bearings and Afya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RBC Bearings Incorporated and Afya, you can compare the effects of market volatilities on RBC Bearings and Afya 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 RBC Bearings with a short position of Afya. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Bearings and Afya.
Diversification Opportunities for RBC Bearings and Afya
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between RBC and Afya is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding RBC Bearings Incorporated and Afya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afya and RBC Bearings 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 RBC Bearings Incorporated are associated (or correlated) with Afya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afya has no effect on the direction of RBC Bearings i.e., RBC Bearings and Afya go up and down completely randomly.
Pair Corralation between RBC Bearings and Afya
Considering the 90-day investment horizon RBC Bearings Incorporated is expected to generate 1.16 times more return on investment than Afya. However, RBC Bearings is 1.16 times more volatile than Afya. It trades about 0.33 of its potential returns per unit of risk. Afya is currently generating about 0.03 per unit of risk. If you would invest 28,857 in RBC Bearings Incorporated on August 28, 2024 and sell it today you would earn a total of 5,021 from holding RBC Bearings Incorporated or generate 17.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
RBC Bearings Incorporated vs. Afya
Performance |
| Timeline |
| RBC Bearings |
| Afya |
RBC Bearings and Afya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Bearings and Afya
The main advantage of trading using opposite RBC Bearings and Afya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Bearings position performs unexpectedly, Afya 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 Afya will offset losses from the drop in Afya's long position.| RBC Bearings vs. Lincoln Electric Holdings | RBC Bearings vs. Kennametal | RBC Bearings vs. Toro Co | RBC Bearings vs. Snap On |
| Afya vs. American Public Education | Afya vs. Lincoln Educational Services | Afya vs. Adtalem Global Education |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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