Correlation Between RBC Bearings and Stanley Black

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

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

Diversification Opportunities for RBC Bearings and Stanley Black

0.0

Correlation Coefficient

RBC Bearings  Stanley Black

Pay attention - limited upside

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

Pair Corralation between RBC Bearings and Stanley Black

If you would invest (100.00) in RBC Bearings on December 27, 2024 and sell it today you would earn a total of  100.00  from holding RBC Bearings or generate -100.0% return on investment over 90 days.

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

RBC Bearings  vs.  Stanley Black Decker

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.

Stanley Black Decker

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stanley Black Decker has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Stanley Black is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with RBC Bearings and Stanley Black

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

The idea behind RBC Bearings and Stanley Black Decker 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.