Correlation Between RBC Bearings and Viemed Healthcare
Can any of the company-specific risk be diversified away by investing in both RBC Bearings and Viemed Healthcare 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 Viemed Healthcare 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 Viemed Healthcare, you can compare the effects of market volatilities on RBC Bearings and Viemed Healthcare 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 Viemed Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Bearings and Viemed Healthcare.
Diversification Opportunities for RBC Bearings and Viemed Healthcare
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between RBC and Viemed is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding RBC Bearings Incorporated and Viemed Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viemed Healthcare 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 Viemed Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viemed Healthcare has no effect on the direction of RBC Bearings i.e., RBC Bearings and Viemed Healthcare go up and down completely randomly.
Pair Corralation between RBC Bearings and Viemed Healthcare
Considering the 90-day investment horizon RBC Bearings Incorporated is expected to generate 0.66 times more return on investment than Viemed Healthcare. However, RBC Bearings Incorporated is 1.52 times less risky than Viemed Healthcare. It trades about 0.06 of its potential returns per unit of risk. Viemed Healthcare is currently generating about 0.03 per unit of risk. If you would invest 21,891 in RBC Bearings Incorporated on August 31, 2024 and sell it today you would earn a total of 12,075 from holding RBC Bearings Incorporated or generate 55.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RBC Bearings Incorporated vs. Viemed Healthcare
Performance |
| Timeline |
| RBC Bearings |
| Viemed Healthcare |
RBC Bearings and Viemed Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Bearings and Viemed Healthcare
The main advantage of trading using opposite RBC Bearings and Viemed Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Bearings position performs unexpectedly, Viemed Healthcare 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 Viemed Healthcare will offset losses from the drop in Viemed Healthcare's long position.| RBC Bearings vs. Lincoln Electric Holdings | RBC Bearings vs. Kennametal | RBC Bearings vs. Toro Co | RBC Bearings vs. Snap On |
| Viemed Healthcare vs. Profound Medical Corp | Viemed Healthcare vs. Si Bone | Viemed Healthcare vs. IRIDEX | Viemed Healthcare vs. SurModics |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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