Correlation Between RBC Bearings and Xtant Medical
Can any of the company-specific risk be diversified away by investing in both RBC Bearings and Xtant Medical 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 Xtant Medical 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 Xtant Medical Holdings, you can compare the effects of market volatilities on RBC Bearings and Xtant Medical 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 Xtant Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Bearings and Xtant Medical.
Diversification Opportunities for RBC Bearings and Xtant Medical
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RBC and Xtant is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding RBC Bearings Incorporated and Xtant Medical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtant Medical 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 Xtant Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtant Medical Holdings has no effect on the direction of RBC Bearings i.e., RBC Bearings and Xtant Medical go up and down completely randomly.
Pair Corralation between RBC Bearings and Xtant Medical
Considering the 90-day investment horizon RBC Bearings Incorporated is expected to generate 0.35 times more return on investment than Xtant Medical. However, RBC Bearings Incorporated is 2.89 times less risky than Xtant Medical. It trades about 0.08 of its potential returns per unit of risk. Xtant Medical Holdings is currently generating about -0.01 per unit of risk. If you would invest 21,314 in RBC Bearings Incorporated on August 31, 2024 and sell it today you would earn a total of 12,197 from holding RBC Bearings Incorporated or generate 57.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
RBC Bearings Incorporated vs. Xtant Medical Holdings
Performance |
| Timeline |
| RBC Bearings |
| Xtant Medical Holdings |
RBC Bearings and Xtant Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Bearings and Xtant Medical
The main advantage of trading using opposite RBC Bearings and Xtant Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Bearings position performs unexpectedly, Xtant Medical 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 Xtant Medical will offset losses from the drop in Xtant Medical's long position.| RBC Bearings vs. Lincoln Electric Holdings | RBC Bearings vs. Kennametal | RBC Bearings vs. Toro Co | RBC Bearings vs. Snap On |
| Xtant Medical vs. Neuropace | Xtant Medical vs. Electromed | Xtant Medical vs. Orthopediatrics Corp | Xtant Medical 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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