Correlation Between Keen Vision and RCI Hospitality

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

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

Diversification Opportunities for Keen Vision and RCI Hospitality

0.0

Correlation Coefficient

Keen Vision  RCI Hospitality

Pay attention - limited upside

The 3 months correlation between Keen and RCI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Keen Vision Acquisition 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 Keen Vision 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 Keen Vision Acquisition 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 Keen Vision i.e., Keen Vision and RCI Hospitality go up and down completely randomly.

Pair Corralation between Keen Vision and RCI Hospitality

Assuming the 90 days horizon Keen Vision Acquisition is expected to generate 20.79 times more return on investment than RCI Hospitality. However, Keen Vision is 20.79 times more volatile than RCI Hospitality Holdings. It trades about 0.04 of its potential returns per unit of risk. RCI Hospitality Holdings is currently generating about -0.03 per unit of risk. If you would invest  1,132  in Keen Vision Acquisition on October 3, 2024 and sell it today you would lose (33.00) from holding Keen Vision Acquisition or give up 2.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.34%
Values	Daily Returns

Keen Vision Acquisition  vs.  RCI Hospitality Holdings

Keen Vision Acquisition

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Keen Vision Acquisition are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting fundamental indicators, Keen Vision may actually be approaching a critical reversion point that can send shares even higher in February 2025.

RCI Hospitality Holdings

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in RCI Hospitality Holdings are ranked lower than 18 (%) 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 Keen Vision and RCI Hospitality

The main advantage of trading using opposite Keen Vision and RCI Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keen Vision 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 Keen Vision Acquisition 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.