Correlation Between RBC Bearings and MISUMI GROUP

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

Diversification Opportunities for RBC Bearings and MISUMI GROUP

-0.6

Correlation Coefficient

RBC Bearings  MISUMI GROUP

Excellent diversification

The 3 months correlation between RBC and MISUMI is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding RBC Bearings Incorporated and MISUMI GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MISUMI GROUP INC 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 MISUMI GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MISUMI GROUP INC has no effect on the direction of RBC Bearings i.e., RBC Bearings and MISUMI GROUP go up and down completely randomly.

Pair Corralation between RBC Bearings and MISUMI GROUP

Assuming the 90 days horizon RBC Bearings Incorporated is expected to generate 0.91 times more return on investment than MISUMI GROUP. However, RBC Bearings Incorporated is 1.1 times less risky than MISUMI GROUP. It trades about 0.17 of its potential returns per unit of risk. MISUMI GROUP INC is currently generating about -0.07 per unit of risk. If you would invest  28,200  in RBC Bearings Incorporated on April 24, 2025 and sell it today you would earn a total of  5,000  from holding RBC Bearings Incorporated or generate 17.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

RBC Bearings Incorporated  vs.  MISUMI GROUP INC

RBC Bearings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RBC Bearings Incorporated are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, RBC Bearings reported solid returns over the last few months and may actually be approaching a breakup point.

MISUMI GROUP INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days MISUMI GROUP INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with RBC Bearings and MISUMI GROUP

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

The idea behind RBC Bearings Incorporated and MISUMI GROUP INC 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.