Correlation Between RBC Bearings and Capital Clean
Can any of the company-specific risk be diversified away by investing in both RBC Bearings and Capital Clean 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 Capital Clean 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 Capital Clean Energy, you can compare the effects of market volatilities on RBC Bearings and Capital Clean 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 Capital Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Bearings and Capital Clean.
Diversification Opportunities for RBC Bearings and Capital Clean
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RBC and Capital is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding RBC Bearings Incorporated and Capital Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Clean Energy 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 Capital Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Clean Energy has no effect on the direction of RBC Bearings i.e., RBC Bearings and Capital Clean go up and down completely randomly.
Pair Corralation between RBC Bearings and Capital Clean
Considering the 90-day investment horizon RBC Bearings Incorporated is expected to generate 1.59 times more return on investment than Capital Clean. However, RBC Bearings is 1.59 times more volatile than Capital Clean Energy. It trades about 0.43 of its potential returns per unit of risk. Capital Clean Energy is currently generating about 0.17 per unit of risk. If you would invest 30,032 in RBC Bearings Incorporated on November 6, 2024 and sell it today you would earn a total of 6,697 from holding RBC Bearings Incorporated or generate 22.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RBC Bearings Incorporated vs. Capital Clean Energy
Performance |
| Timeline |
| RBC Bearings |
| Capital Clean Energy |
RBC Bearings and Capital Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Bearings and Capital Clean
The main advantage of trading using opposite RBC Bearings and Capital Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Bearings position performs unexpectedly, Capital Clean 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 Capital Clean will offset losses from the drop in Capital Clean's long position.| RBC Bearings vs. Lincoln Electric Holdings | RBC Bearings vs. Kennametal | RBC Bearings vs. Toro Co | RBC Bearings vs. Snap On |
| Capital Clean vs. American Vanguard | Capital Clean vs. Toronto Dominion Bank | Capital Clean vs. Albemarle | Capital Clean vs. AG Mortgage Investment |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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