Correlation Between Artisan Partners and RCI Hospitality

Can any of the company-specific risk be diversified away by investing in both Artisan Partners and RCI Hospitality 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 Artisan Partners and RCI Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Artisan Partners Asset and RCI Hospitality Holdings, you can compare the effects of market volatilities on Artisan Partners and RCI Hospitality 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 Artisan Partners with a short position of RCI Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Partners and RCI Hospitality.

Diversification Opportunities for Artisan Partners and RCI Hospitality

0.82

Correlation Coefficient

Artisan Partners  RCI Hospitality

Very poor diversification

The 3 months correlation between Artisan and RCI is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Partners Asset and RCI Hospitality Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCI Hospitality Holdings and Artisan Partners 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 Artisan Partners Asset are associated (or correlated) with RCI Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCI Hospitality Holdings has no effect on the direction of Artisan Partners i.e., Artisan Partners and RCI Hospitality go up and down completely randomly.

Pair Corralation between Artisan Partners and RCI Hospitality

Given the investment horizon of 90 days Artisan Partners Asset is expected to generate 0.79 times more return on investment than RCI Hospitality. However, Artisan Partners Asset is 1.26 times less risky than RCI Hospitality. It trades about 0.18 of its potential returns per unit of risk. RCI Hospitality Holdings is currently generating about 0.13 per unit of risk. If you would invest  3,987  in Artisan Partners Asset on September 3, 2024 and sell it today you would earn a total of  892.00  from holding Artisan Partners Asset or generate 22.37% return on investment over 90 days.

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

Artisan Partners Asset  vs.  RCI Hospitality Holdings

Artisan Partners Asset

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Partners Asset are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Artisan Partners displayed solid returns over the last few months and may actually be approaching a breakup point.

RCI Hospitality Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in RCI Hospitality Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain fundamental indicators, RCI Hospitality disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Artisan Partners and RCI Hospitality

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

The idea behind Artisan Partners Asset and RCI Hospitality Holdings 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.