Correlation Between RCI Hospitality and Tianjin Capital
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and Tianjin Capital 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 RCI Hospitality and Tianjin Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RCI Hospitality Holdings and Tianjin Capital Environmental, you can compare the effects of market volatilities on RCI Hospitality and Tianjin Capital 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 RCI Hospitality with a short position of Tianjin Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and Tianjin Capital.
Diversification Opportunities for RCI Hospitality and Tianjin Capital
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RCI and Tianjin is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and Tianjin Capital Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Capital Envi and RCI Hospitality 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 RCI Hospitality Holdings are associated (or correlated) with Tianjin Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Capital Envi has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and Tianjin Capital go up and down completely randomly.
Pair Corralation between RCI Hospitality and Tianjin Capital
If you would invest 5,314 in RCI Hospitality Holdings on September 24, 2024 and sell it today you would earn a total of 366.00 from holding RCI Hospitality Holdings or generate 6.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
RCI Hospitality Holdings vs. Tianjin Capital Environmental
Performance |
Timeline |
RCI Hospitality Holdings |
Tianjin Capital Envi |
RCI Hospitality and Tianjin Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with RCI Hospitality and Tianjin Capital
The main advantage of trading using opposite RCI Hospitality and Tianjin Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, Tianjin Capital 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 Tianjin Capital will offset losses from the drop in Tianjin Capital's long position.RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys Corp |
Tianjin Capital vs. Morgan Stanley | Tianjin Capital vs. Western Acquisition Ventures | Tianjin Capital vs. BJs Restaurants | Tianjin Capital vs. Bluerock Homes Trust |
Check out your portfolio center.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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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