Correlation Between RBC Bearings and Fidelis Insurance
Can any of the company-specific risk be diversified away by investing in both RBC Bearings and Fidelis Insurance 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 Fidelis Insurance 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 Fidelis Insurance Holdings, you can compare the effects of market volatilities on RBC Bearings and Fidelis Insurance 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 Fidelis Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Bearings and Fidelis Insurance.
Diversification Opportunities for RBC Bearings and Fidelis Insurance
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between RBC and Fidelis is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding RBC Bearings Incorporated and Fidelis Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelis Insurance 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 Fidelis Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelis Insurance has no effect on the direction of RBC Bearings i.e., RBC Bearings and Fidelis Insurance go up and down completely randomly.
Pair Corralation between RBC Bearings and Fidelis Insurance
Considering the 90-day investment horizon RBC Bearings Incorporated is expected to generate 1.06 times more return on investment than Fidelis Insurance. However, RBC Bearings is 1.06 times more volatile than Fidelis Insurance Holdings. It trades about 0.33 of its potential returns per unit of risk. Fidelis Insurance Holdings is currently generating about 0.34 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
RBC Bearings Incorporated vs. Fidelis Insurance Holdings
Performance |
| Timeline |
| RBC Bearings |
| Fidelis Insurance |
RBC Bearings and Fidelis Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Bearings and Fidelis Insurance
The main advantage of trading using opposite RBC Bearings and Fidelis Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Bearings position performs unexpectedly, Fidelis Insurance 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 Fidelis Insurance will offset losses from the drop in Fidelis Insurance's long position.| RBC Bearings vs. Lincoln Electric Holdings | RBC Bearings vs. Kennametal | RBC Bearings vs. Toro Co | RBC Bearings vs. Snap On |
| Fidelis Insurance vs. Enstar Group Limited | Fidelis Insurance vs. Aegon NV ADR | Fidelis Insurance vs. American International Group | Fidelis Insurance vs. Axa Equitable 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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