Correlation Between RBC Bearings and Gamehost

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

Diversification Opportunities for RBC Bearings and Gamehost

-0.49

Correlation Coefficient

RBC Bearings  Gamehost

Very good diversification

The 3 months correlation between RBC and Gamehost is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding RBC Bearings Incorporated and Gamehost in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamehost 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 Gamehost. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamehost has no effect on the direction of RBC Bearings i.e., RBC Bearings and Gamehost go up and down completely randomly.

Pair Corralation between RBC Bearings and Gamehost

Considering the 90-day investment horizon RBC Bearings Incorporated is expected to under-perform the Gamehost. But the stock apears to be less risky and, when comparing its historical volatility, RBC Bearings Incorporated is 1.65 times less risky than Gamehost. The stock trades about -0.57 of its potential returns per unit of risk. The Gamehost is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest  741.00  in Gamehost on October 11, 2024 and sell it today you would lose (44.00) from holding Gamehost or give up 5.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

RBC Bearings Incorporated  vs.  Gamehost

RBC Bearings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in RBC Bearings Incorporated are ranked lower than 5 (%) 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 February 2025.

Gamehost

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with RBC Bearings and Gamehost

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

The idea behind RBC Bearings Incorporated and Gamehost 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.