Correlation Between RBC Bearings and PS International
Can any of the company-specific risk be diversified away by investing in both RBC Bearings and PS International 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 PS International 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 PS International Group, you can compare the effects of market volatilities on RBC Bearings and PS International 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 PS International. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Bearings and PS International.
Diversification Opportunities for RBC Bearings and PS International
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between RBC and PSIG is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding RBC Bearings Incorporated and PS International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PS International 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 PS International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PS International has no effect on the direction of RBC Bearings i.e., RBC Bearings and PS International go up and down completely randomly.
Pair Corralation between RBC Bearings and PS International
Considering the 90-day investment horizon RBC Bearings Incorporated is expected to generate 0.1 times more return on investment than PS International. However, RBC Bearings Incorporated is 9.56 times less risky than PS International. It trades about 0.06 of its potential returns per unit of risk. PS International Group is currently generating about -0.05 per unit of risk. If you would invest 20,759 in RBC Bearings Incorporated on September 14, 2024 and sell it today you would earn a total of 11,965 from holding RBC Bearings Incorporated or generate 57.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 21.01% |
| Values | Daily Returns |
RBC Bearings Incorporated vs. PS International Group
Performance |
| Timeline |
| RBC Bearings |
| PS International |
RBC Bearings and PS International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Bearings and PS International
The main advantage of trading using opposite RBC Bearings and PS International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Bearings position performs unexpectedly, PS International 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 PS International will offset losses from the drop in PS International's long position.| RBC Bearings vs. Lincoln Electric Holdings | RBC Bearings vs. Kennametal | RBC Bearings vs. Toro Co | RBC Bearings vs. Snap On |
| PS International vs. Mannatech Incorporated | PS International vs. RBC Bearings Incorporated | PS International vs. Albertsons Companies | PS International vs. Toro Co |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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