Correlation Between RCI Hospitality and CROWN

Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and CROWN 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 CROWN 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 CROWN CASTLE INTERNATIONAL, you can compare the effects of market volatilities on RCI Hospitality and CROWN 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 CROWN. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and CROWN.

Diversification Opportunities for RCI Hospitality and CROWN

-0.58

Correlation Coefficient

RCI Hospitality  CROWN

Excellent diversification

The 3 months correlation between RCI and CROWN is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and CROWN CASTLE INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CROWN CASTLE INTERNA 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 CROWN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CROWN CASTLE INTERNA has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and CROWN go up and down completely randomly.

Pair Corralation between RCI Hospitality and CROWN

Given the investment horizon of 90 days RCI Hospitality is expected to generate 30.61 times less return on investment than CROWN. In addition to that, RCI Hospitality is 1.95 times more volatile than CROWN CASTLE INTERNATIONAL. It trades about 0.0 of its total potential returns per unit of risk. CROWN CASTLE INTERNATIONAL is currently generating about 0.05 per unit of volatility. If you would invest  6,353  in CROWN CASTLE INTERNATIONAL on October 4, 2024 and sell it today you would earn a total of  910.00  from holding CROWN CASTLE INTERNATIONAL or generate 14.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	84.29%
Values	Daily Returns

RCI Hospitality Holdings  vs.  CROWN CASTLE INTERNATIONAL

RCI Hospitality Holdings

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in RCI Hospitality Holdings are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, RCI Hospitality disclosed solid returns over the last few months and may actually be approaching a breakup point.

CROWN CASTLE INTERNA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CROWN CASTLE INTERNATIONAL are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, CROWN is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with RCI Hospitality and CROWN

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

The idea behind RCI Hospitality Holdings and CROWN CASTLE INTERNATIONAL 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.