Correlation Between RBC Bearings and 360 Finance
Can any of the company-specific risk be diversified away by investing in both RBC Bearings and 360 Finance 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 360 Finance 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 360 Finance, you can compare the effects of market volatilities on RBC Bearings and 360 Finance 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 360 Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Bearings and 360 Finance.
Diversification Opportunities for RBC Bearings and 360 Finance
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between RBC and 360 is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding RBC Bearings Incorporated and 360 Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 360 Finance 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 360 Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 360 Finance has no effect on the direction of RBC Bearings i.e., RBC Bearings and 360 Finance go up and down completely randomly.
Pair Corralation between RBC Bearings and 360 Finance
Considering the 90-day investment horizon RBC Bearings Incorporated is expected to generate 0.86 times more return on investment than 360 Finance. However, RBC Bearings Incorporated is 1.17 times less risky than 360 Finance. It trades about 0.42 of its potential returns per unit of risk. 360 Finance is currently generating about 0.23 per unit of risk. If you would invest 29,785 in RBC Bearings Incorporated on November 9, 2024 and sell it today you would earn a total of 6,749 from holding RBC Bearings Incorporated or generate 22.66% 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. 360 Finance
Performance |
| Timeline |
| RBC Bearings |
| 360 Finance |
RBC Bearings and 360 Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Bearings and 360 Finance
The main advantage of trading using opposite RBC Bearings and 360 Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Bearings position performs unexpectedly, 360 Finance 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 360 Finance will offset losses from the drop in 360 Finance's long position.| RBC Bearings vs. Lincoln Electric Holdings | RBC Bearings vs. Kennametal | RBC Bearings vs. Toro Co | RBC Bearings vs. Snap On |
| 360 Finance vs. Turning Point Brands | 360 Finance vs. British American Tobacco | 360 Finance vs. Philip Morris International | 360 Finance vs. Japan Tobacco ADR |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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