Correlation Between RBC Bearings and Citi Trends
Can any of the company-specific risk be diversified away by investing in both RBC Bearings and Citi Trends 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 Citi Trends 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 Citi Trends, you can compare the effects of market volatilities on RBC Bearings and Citi Trends 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 Citi Trends. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Bearings and Citi Trends.
Diversification Opportunities for RBC Bearings and Citi Trends
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between RBC and Citi is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding RBC Bearings Incorporated and Citi Trends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citi Trends 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 Citi Trends. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citi Trends has no effect on the direction of RBC Bearings i.e., RBC Bearings and Citi Trends go up and down completely randomly.
Pair Corralation between RBC Bearings and Citi Trends
Considering the 90-day investment horizon RBC Bearings Incorporated is expected to generate 0.38 times more return on investment than Citi Trends. However, RBC Bearings Incorporated is 2.62 times less risky than Citi Trends. It trades about -0.2 of its potential returns per unit of risk. Citi Trends is currently generating about -0.19 per unit of risk. If you would invest 34,873 in RBC Bearings Incorporated on January 5, 2025 and sell it today you would lose (3,154) from holding RBC Bearings Incorporated or give up 9.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RBC Bearings Incorporated vs. Citi Trends
Performance |
| Timeline |
| RBC Bearings |
| Citi Trends |
RBC Bearings and Citi Trends Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Bearings and Citi Trends
The main advantage of trading using opposite RBC Bearings and Citi Trends positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Bearings position performs unexpectedly, Citi Trends 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 Citi Trends will offset losses from the drop in Citi Trends' long position.| RBC Bearings vs. Lincoln Electric Holdings | RBC Bearings vs. Kennametal | RBC Bearings vs. Toro Co | RBC Bearings vs. Snap On |
| Citi Trends vs. JJill Inc | Citi Trends vs. Zumiez Inc | Citi Trends vs. Tillys Inc | Citi Trends vs. Duluth Holdings |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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