Correlation Between RBC Bearings and VULCAN
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By analyzing existing cross correlation between RBC Bearings Incorporated and VULCAN MATLS 39, you can compare the effects of market volatilities on RBC Bearings and VULCAN 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 VULCAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Bearings and VULCAN.
Diversification Opportunities for RBC Bearings and VULCAN
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between RBC and VULCAN is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding RBC Bearings Incorporated and VULCAN MATLS 39 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VULCAN MATLS 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 VULCAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VULCAN MATLS has no effect on the direction of RBC Bearings i.e., RBC Bearings and VULCAN go up and down completely randomly.
Pair Corralation between RBC Bearings and VULCAN
Considering the 90-day investment horizon RBC Bearings Incorporated is expected to generate 12.12 times more return on investment than VULCAN. However, RBC Bearings is 12.12 times more volatile than VULCAN MATLS 39. It trades about 0.25 of its potential returns per unit of risk. VULCAN MATLS 39 is currently generating about 0.09 per unit of risk. If you would invest 29,709 in RBC Bearings Incorporated on November 30, 2024 and sell it today you would earn a total of 6,211 from holding RBC Bearings Incorporated or generate 20.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.24% |
| Values | Daily Returns |
RBC Bearings Incorporated vs. VULCAN MATLS 39
Performance |
| Timeline |
| RBC Bearings |
| VULCAN MATLS |
RBC Bearings and VULCAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Bearings and VULCAN
The main advantage of trading using opposite RBC Bearings and VULCAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Bearings position performs unexpectedly, VULCAN 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 VULCAN will offset losses from the drop in VULCAN's long position.| RBC Bearings vs. Lincoln Electric Holdings | RBC Bearings vs. Kennametal | RBC Bearings vs. Toro Co | RBC Bearings vs. Snap On |
| VULCAN vs. Lincoln Educational Services | VULCAN vs. Turning Point Brands | VULCAN vs. British American Tobacco | VULCAN vs. Graham Holdings 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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