Correlation Between RBC Bearings and CapitaLand Investment
Can any of the company-specific risk be diversified away by investing in both RBC Bearings and CapitaLand Investment 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 CapitaLand Investment 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 CapitaLand Investment Limited, you can compare the effects of market volatilities on RBC Bearings and CapitaLand Investment 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 CapitaLand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Bearings and CapitaLand Investment.
Diversification Opportunities for RBC Bearings and CapitaLand Investment
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RBC and CapitaLand is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding RBC Bearings Incorporated and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment 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 CapitaLand Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CapitaLand Investment has no effect on the direction of RBC Bearings i.e., RBC Bearings and CapitaLand Investment go up and down completely randomly.
Pair Corralation between RBC Bearings and CapitaLand Investment
Considering the 90-day investment horizon RBC Bearings Incorporated is expected to generate 0.61 times more return on investment than CapitaLand Investment. However, RBC Bearings Incorporated is 1.63 times less risky than CapitaLand Investment. It trades about 0.16 of its potential returns per unit of risk. CapitaLand Investment Limited is currently generating about -0.01 per unit of risk. If you would invest 28,652 in RBC Bearings Incorporated on September 12, 2024 and sell it today you would earn a total of 4,968 from holding RBC Bearings Incorporated or generate 17.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
RBC Bearings Incorporated vs. CapitaLand Investment Limited
Performance |
| Timeline |
| RBC Bearings |
| CapitaLand Investment |
RBC Bearings and CapitaLand Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Bearings and CapitaLand Investment
The main advantage of trading using opposite RBC Bearings and CapitaLand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Bearings position performs unexpectedly, CapitaLand Investment 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 CapitaLand Investment will offset losses from the drop in CapitaLand Investment's long position.| RBC Bearings vs. Lincoln Electric Holdings | RBC Bearings vs. Kennametal | RBC Bearings vs. Toro Co | RBC Bearings vs. Snap On |
| CapitaLand Investment vs. IRSA Inversiones Y | CapitaLand Investment vs. Anywhere Real Estate | CapitaLand Investment vs. Newmark Group | CapitaLand Investment vs. Wharf Real Estate |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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