Correlation Between Planet Image and RBC Bearings

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

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

Diversification Opportunities for Planet Image and RBC Bearings

-0.01

Correlation Coefficient

Planet Image  RBC Bearings

Good diversification

The 3 months correlation between Planet and RBC is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Planet Image International and RBC Bearings Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Bearings and Planet Image 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 Planet Image International 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 Planet Image i.e., Planet Image and RBC Bearings go up and down completely randomly.

Pair Corralation between Planet Image and RBC Bearings

Given the investment horizon of 90 days Planet Image International is expected to generate 5.94 times more return on investment than RBC Bearings. However, Planet Image is 5.94 times more volatile than RBC Bearings Incorporated. It trades about 0.08 of its potential returns per unit of risk. RBC Bearings Incorporated is currently generating about 0.19 per unit of risk. If you would invest  125.00  in Planet Image International on May 6, 2025 and sell it today you would earn a total of  28.00  from holding Planet Image International or generate 22.4% return on investment over 90 days.

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

Planet Image International  vs.  RBC Bearings Incorporated

Planet Image Interna

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Planet Image International are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental drivers, Planet Image displayed solid returns over the last few months and may actually be approaching a breakup point.

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 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental drivers, RBC Bearings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Planet Image and RBC Bearings

The main advantage of trading using opposite Planet Image and RBC Bearings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Image 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 Planet Image International and RBC Bearings Incorporated 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.