Correlation Between RBC Bearings and Jackson Financial
Can any of the company-specific risk be diversified away by investing in both RBC Bearings and Jackson Financial 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 Jackson Financial 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 Jackson Financial, you can compare the effects of market volatilities on RBC Bearings and Jackson Financial 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 Jackson Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Bearings and Jackson Financial.
Diversification Opportunities for RBC Bearings and Jackson Financial
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between RBC and Jackson is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding RBC Bearings Incorporated and Jackson Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackson Financial 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 Jackson Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jackson Financial has no effect on the direction of RBC Bearings i.e., RBC Bearings and Jackson Financial go up and down completely randomly.
Pair Corralation between RBC Bearings and Jackson Financial
Considering the 90-day investment horizon RBC Bearings Incorporated is expected to generate 3.0 times more return on investment than Jackson Financial. However, RBC Bearings is 3.0 times more volatile than Jackson Financial. It trades about 0.11 of its potential returns per unit of risk. Jackson Financial is currently generating about 0.1 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RBC Bearings Incorporated vs. Jackson Financial
Performance |
| Timeline |
| RBC Bearings |
| Jackson Financial |
RBC Bearings and Jackson Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Bearings and Jackson Financial
The main advantage of trading using opposite RBC Bearings and Jackson Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Bearings position performs unexpectedly, Jackson Financial 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 Jackson Financial will offset losses from the drop in Jackson Financial's long position.| RBC Bearings vs. Kennametal | RBC Bearings vs. Toro Co | RBC Bearings vs. Snap On | RBC Bearings vs. Timken Company |
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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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