Correlation Between RBC Bearings and Vindicator Silver

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

Diversification Opportunities for RBC Bearings and Vindicator Silver

-0.22

Correlation Coefficient

RBC Bearings  Vindicator Silver

Very good diversification

The 3 months correlation between RBC and Vindicator is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding RBC Bearings Incorporated and Vindicator Silver Lead Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vindicator Silver Lead 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 Vindicator Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vindicator Silver Lead has no effect on the direction of RBC Bearings i.e., RBC Bearings and Vindicator Silver go up and down completely randomly.

Pair Corralation between RBC Bearings and Vindicator Silver

Considering the 90-day investment horizon RBC Bearings Incorporated is expected to generate 0.65 times more return on investment than Vindicator Silver. However, RBC Bearings Incorporated is 1.54 times less risky than Vindicator Silver. It trades about 0.01 of its potential returns per unit of risk. Vindicator Silver Lead Mining is currently generating about -0.16 per unit of risk. If you would invest  29,938  in RBC Bearings Incorporated on September 29, 2024 and sell it today you would earn a total of  81.00  from holding RBC Bearings Incorporated or generate 0.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

RBC Bearings Incorporated  vs.  Vindicator Silver Lead Mining

RBC Bearings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RBC Bearings Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, RBC Bearings is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Vindicator Silver Lead

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vindicator Silver Lead Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with RBC Bearings and Vindicator Silver

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

The idea behind RBC Bearings Incorporated and Vindicator Silver Lead Mining 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.