Correlation Between RBC Bearings and Getty Copper

Can any of the company-specific risk be diversified away by investing in both RBC Bearings and Getty Copper 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 Getty Copper 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 Getty Copper, you can compare the effects of market volatilities on RBC Bearings and Getty Copper 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 Getty Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Bearings and Getty Copper.

Diversification Opportunities for RBC Bearings and Getty Copper

0.0

Correlation Coefficient

RBC Bearings  Getty Copper

Pay attention - limited upside

The 3 months correlation between RBC and Getty is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding RBC Bearings Incorporated and Getty Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Copper 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 Getty Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Copper has no effect on the direction of RBC Bearings i.e., RBC Bearings and Getty Copper go up and down completely randomly.

Pair Corralation between RBC Bearings and Getty Copper

If you would invest  28,682  in RBC Bearings Incorporated on September 16, 2024 and sell it today you would earn a total of  4,076  from holding RBC Bearings Incorporated or generate 14.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

RBC Bearings Incorporated  vs.  Getty Copper

RBC Bearings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in RBC Bearings Incorporated are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental drivers, RBC Bearings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Getty Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Getty Copper has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Getty Copper is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with RBC Bearings and Getty Copper

The main advantage of trading using opposite RBC Bearings and Getty Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Bearings position performs unexpectedly, Getty Copper 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 Getty Copper will offset losses from the drop in Getty Copper's long position.

The idea behind RBC Bearings Incorporated and Getty Copper pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.