Correlation Between Old National and RBC Bearings

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

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

Diversification Opportunities for Old National and RBC Bearings

0.0

Correlation Coefficient

Old National  RBC Bearings

Pay attention - limited upside

The 3 months correlation between Old and RBC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Old National Bancorp and RBC Bearings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Bearings and Old National 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 Old National Bancorp 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 Old National i.e., Old National and RBC Bearings go up and down completely randomly.

Pair Corralation between Old National and RBC Bearings

If you would invest  2,456  in Old National Bancorp on December 27, 2024 and sell it today you would earn a total of  31.00  from holding Old National Bancorp or generate 1.26% return on investment over 90 days.

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

Old National Bancorp  vs.  RBC Bearings

Old National Bancorp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Old National Bancorp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Old National is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

RBC Bearings

Risk-Adjusted Performance

Very Weak

Over the last 90 days RBC Bearings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, RBC Bearings is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Old National and RBC Bearings

The main advantage of trading using opposite Old National and RBC Bearings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old National 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 Old National Bancorp and RBC Bearings 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.