Correlation Between Regal Beloit and Fanuc
Can any of the company-specific risk be diversified away by investing in both Regal Beloit and Fanuc 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 Regal Beloit and Fanuc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regal Beloit and Fanuc, you can compare the effects of market volatilities on Regal Beloit and Fanuc 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 Regal Beloit with a short position of Fanuc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regal Beloit and Fanuc.
Diversification Opportunities for Regal Beloit and Fanuc
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Regal and Fanuc is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Regal Beloit and Fanuc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fanuc and Regal Beloit 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 Regal Beloit are associated (or correlated) with Fanuc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fanuc has no effect on the direction of Regal Beloit i.e., Regal Beloit and Fanuc go up and down completely randomly.
Pair Corralation between Regal Beloit and Fanuc
Considering the 90-day investment horizon Regal Beloit is expected to generate 0.5 times more return on investment than Fanuc. However, Regal Beloit is 2.01 times less risky than Fanuc. It trades about 0.02 of its potential returns per unit of risk. Fanuc is currently generating about 0.01 per unit of risk. If you would invest 17,086 in Regal Beloit on August 29, 2024 and sell it today you would earn a total of 111.00 from holding Regal Beloit or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regal Beloit vs. Fanuc
Performance |
| Timeline |
| Regal Beloit |
| Fanuc |
Regal Beloit and Fanuc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regal Beloit and Fanuc
The main advantage of trading using opposite Regal Beloit and Fanuc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regal Beloit position performs unexpectedly, Fanuc 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 Fanuc will offset losses from the drop in Fanuc's long position.| Regal Beloit vs. IDEX Corporation | Regal Beloit vs. Watts Water Technologies | Regal Beloit vs. Donaldson | Regal Beloit vs. Gorman Rupp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |