Correlation Between RBC Bearings and Old National

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

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

Diversification Opportunities for RBC Bearings and Old National

0.0

Correlation Coefficient

RBC Bearings  Old National

Pay attention - limited upside

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

Pair Corralation between RBC Bearings and Old National

If you would invest  2,451  in Old National Bancorp on November 20, 2024 and sell it today you would earn a total of  70.00  from holding Old National Bancorp or generate 2.86% return on investment over 90 days.

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

RBC Bearings  vs.  Old National Bancorp

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.

Old National Bancorp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Old National Bancorp are ranked lower than 4 (%) 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.

Pair Trading with RBC Bearings and Old National

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

The idea behind RBC Bearings and Old National Bancorp 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.