Correlation Between RBC Bearings and Premier Exhibitions
Can any of the company-specific risk be diversified away by investing in both RBC Bearings and Premier Exhibitions 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 Premier Exhibitions 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 Premier Exhibitions, you can compare the effects of market volatilities on RBC Bearings and Premier Exhibitions 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 Premier Exhibitions. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Bearings and Premier Exhibitions.
Diversification Opportunities for RBC Bearings and Premier Exhibitions
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between RBC and Premier is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding RBC Bearings Incorporated and Premier Exhibitions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Exhibitions 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 Premier Exhibitions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Exhibitions has no effect on the direction of RBC Bearings i.e., RBC Bearings and Premier Exhibitions go up and down completely randomly.
Pair Corralation between RBC Bearings and Premier Exhibitions
If you would invest 27,589 in RBC Bearings Incorporated on September 14, 2024 and sell it today you would earn a total of 5,135 from holding RBC Bearings Incorporated or generate 18.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
RBC Bearings Incorporated vs. Premier Exhibitions
Performance |
| Timeline |
| RBC Bearings |
| Premier Exhibitions |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
RBC Bearings and Premier Exhibitions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Bearings and Premier Exhibitions
The main advantage of trading using opposite RBC Bearings and Premier Exhibitions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Bearings position performs unexpectedly, Premier Exhibitions 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 Premier Exhibitions will offset losses from the drop in Premier Exhibitions' long position.| RBC Bearings vs. Lincoln Electric Holdings | RBC Bearings vs. Kennametal | RBC Bearings vs. Toro Co | RBC Bearings vs. Snap On |
| Premier Exhibitions vs. Pool Corporation | Premier Exhibitions vs. National Vision Holdings | Premier Exhibitions vs. Lululemon Athletica | Premier Exhibitions vs. Cedar Realty Trust |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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