Correlation Between RBC Bearings and Shenguan Holdings
Can any of the company-specific risk be diversified away by investing in both RBC Bearings and Shenguan Holdings 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 Shenguan Holdings 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 Shenguan Holdings Group, you can compare the effects of market volatilities on RBC Bearings and Shenguan Holdings 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 Shenguan Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Bearings and Shenguan Holdings.
Diversification Opportunities for RBC Bearings and Shenguan Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between RBC and Shenguan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding RBC Bearings Incorporated and Shenguan Holdings Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenguan Holdings 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 Shenguan Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenguan Holdings has no effect on the direction of RBC Bearings i.e., RBC Bearings and Shenguan Holdings go up and down completely randomly.
Pair Corralation between RBC Bearings and Shenguan Holdings
Considering the 90-day investment horizon RBC Bearings is expected to generate 2.8 times less return on investment than Shenguan Holdings. But when comparing it to its historical volatility, RBC Bearings Incorporated is 4.11 times less risky than Shenguan Holdings. It trades about 0.06 of its potential returns per unit of risk. Shenguan Holdings Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 70.00 in Shenguan Holdings Group on September 14, 2024 and sell it today you would earn a total of 17.00 from holding Shenguan Holdings Group or generate 24.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 77.78% |
| Values | Daily Returns |
RBC Bearings Incorporated vs. Shenguan Holdings Group
Performance |
| Timeline |
| RBC Bearings |
| Shenguan Holdings |
RBC Bearings and Shenguan Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Bearings and Shenguan Holdings
The main advantage of trading using opposite RBC Bearings and Shenguan Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Bearings position performs unexpectedly, Shenguan Holdings 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 Shenguan Holdings will offset losses from the drop in Shenguan Holdings' long position.| RBC Bearings vs. Lincoln Electric Holdings | RBC Bearings vs. Kennametal | RBC Bearings vs. Toro Co | RBC Bearings vs. Snap On |
| Shenguan Holdings vs. Ryanair Holdings PLC | Shenguan Holdings vs. RBC Bearings Incorporated | Shenguan Holdings vs. MYR Group | Shenguan Holdings vs. Everus Construction Group |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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