Correlation Between RBC Bearings and Old National
Can any of the company-specific risk be diversified away by investing in both RBC Bearings and Old National 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 Old National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RBC Bearings and Old National Bancorp, you can compare the effects of market volatilities on RBC Bearings and Old National 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 Old National. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Bearings and Old National.
Diversification Opportunities for RBC Bearings and Old National
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RBC and Old is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding RBC Bearings and Old National Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old National Bancorp 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 are associated (or correlated) with Old National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old National Bancorp has no effect on the direction of RBC Bearings i.e., RBC Bearings and Old National go up and down completely randomly.
Pair Corralation between RBC Bearings and Old National
Given the investment horizon of 90 days RBC Bearings is expected to generate 1.16 times more return on investment than Old National. However, RBC Bearings is 1.16 times more volatile than Old National Bancorp. It trades about 0.03 of its potential returns per unit of risk. Old National Bancorp is currently generating about 0.03 per unit of risk. If you would invest 10,971 in RBC Bearings on August 27, 2024 and sell it today you would earn a total of 1,427 from holding RBC Bearings or generate 13.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 93.85% |
| Values | Daily Returns |
RBC Bearings vs. Old National Bancorp
Performance |
| Timeline |
| RBC Bearings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Old National Bancorp |
RBC Bearings and Old National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBC Bearings and Old National
The main advantage of trading using opposite RBC Bearings and Old National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Bearings position performs unexpectedly, Old National 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 Old National will offset losses from the drop in Old National's long position.| RBC Bearings vs. Old National Bancorp | RBC Bearings vs. Pinnacle Financial Partners | RBC Bearings vs. CIT Group Preferred | RBC Bearings vs. Texas Capital Bancshares |
| Old National vs. Capital One Financial | Old National vs. Capital One Financial | Old National vs. Bank of America |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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