Correlation Between Latamgrowth SPAC and RBC Bearings

Can any of the company-specific risk be diversified away by investing in both Latamgrowth SPAC and RBC Bearings 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 Latamgrowth SPAC and RBC Bearings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Latamgrowth SPAC Unit and RBC Bearings Incorporated, you can compare the effects of market volatilities on Latamgrowth SPAC and RBC Bearings 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 Latamgrowth SPAC with a short position of RBC Bearings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Latamgrowth SPAC and RBC Bearings.

Diversification Opportunities for Latamgrowth SPAC and RBC Bearings

0.0

Correlation Coefficient

Latamgrowth SPAC  RBC Bearings

Pay attention - limited upside

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

Pair Corralation between Latamgrowth SPAC and RBC Bearings

If you would invest  30,462  in RBC Bearings Incorporated on December 21, 2024 and sell it today you would earn a total of  2,895  from holding RBC Bearings Incorporated or generate 9.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Latamgrowth SPAC Unit  vs.  RBC Bearings Incorporated

Latamgrowth SPAC Unit

Risk-Adjusted Performance

Very Weak

Over the last 90 days Latamgrowth SPAC Unit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Latamgrowth SPAC is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

RBC Bearings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in RBC Bearings Incorporated are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental drivers, RBC Bearings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Latamgrowth SPAC and RBC Bearings

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

The idea behind Latamgrowth SPAC Unit and RBC Bearings Incorporated 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.

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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.