Correlation Between RBC Bearings and Jewett Cameron
Can any of the company-specific risk be diversified away by investing in both RBC Bearings and Jewett Cameron 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 Jewett Cameron 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 Jewett Cameron Trading, you can compare the effects of market volatilities on RBC Bearings and Jewett Cameron 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 Jewett Cameron. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Bearings and Jewett Cameron.
Diversification Opportunities for RBC Bearings and Jewett Cameron
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RBC and Jewett is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding RBC Bearings Incorporated and Jewett Cameron Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jewett Cameron Trading 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 Jewett Cameron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jewett Cameron Trading has no effect on the direction of RBC Bearings i.e., RBC Bearings and Jewett Cameron go up and down completely randomly.
Pair Corralation between RBC Bearings and Jewett Cameron
Considering the 90-day investment horizon RBC Bearings Incorporated is expected to generate 0.62 times more return on investment than Jewett Cameron. However, RBC Bearings Incorporated is 1.6 times less risky than Jewett Cameron. It trades about 0.11 of its potential returns per unit of risk. Jewett Cameron Trading is currently generating about -0.04 per unit of risk. If you would invest 25,859 in RBC Bearings Incorporated on September 3, 2024 and sell it today you would earn a total of 7,652 from holding RBC Bearings Incorporated or generate 29.59% 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. Jewett Cameron Trading
Performance |
| Timeline |
| RBC Bearings |
| Jewett Cameron Trading |
RBC Bearings and Jewett Cameron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Bearings and Jewett Cameron
The main advantage of trading using opposite RBC Bearings and Jewett Cameron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Bearings position performs unexpectedly, Jewett Cameron 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 Jewett Cameron will offset losses from the drop in Jewett Cameron's long position.| RBC Bearings vs. Kennametal | RBC Bearings vs. Toro Co | RBC Bearings vs. Snap On | RBC Bearings vs. Timken Company |
| Jewett Cameron vs. Analog Devices | Jewett Cameron vs. Sligro Food Group | Jewett Cameron vs. Tyson Foods | Jewett Cameron vs. Advanced Micro Devices |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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