Correlation Between RCI Hospitality and 651639AZ9

Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and 651639AZ9 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 651639AZ9 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 NEM 26 15 JUL 32, you can compare the effects of market volatilities on RCI Hospitality and 651639AZ9 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 651639AZ9. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and 651639AZ9.

Diversification Opportunities for RCI Hospitality and 651639AZ9

-0.03

Correlation Coefficient

RCI Hospitality  651639AZ9

Good diversification

The 3 months correlation between RCI and 651639AZ9 is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and NEM 26 15 JUL 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEM 26 15 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 651639AZ9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEM 26 15 has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and 651639AZ9 go up and down completely randomly.

Pair Corralation between RCI Hospitality and 651639AZ9

Given the investment horizon of 90 days RCI Hospitality Holdings is expected to under-perform the 651639AZ9. In addition to that, RCI Hospitality is 2.91 times more volatile than NEM 26 15 JUL 32. It trades about -0.19 of its total potential returns per unit of risk. NEM 26 15 JUL 32 is currently generating about -0.05 per unit of volatility. If you would invest  8,483  in NEM 26 15 JUL 32 on December 24, 2024 and sell it today you would lose (183.00) from holding NEM 26 15 JUL 32 or give up 2.16% of portfolio value over 90 days.

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

RCI Hospitality Holdings  vs.  NEM 26 15 JUL 32

RCI Hospitality Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days RCI Hospitality Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

NEM 26 15

Risk-Adjusted Performance

Very Weak

Over the last 90 days NEM 26 15 JUL 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 651639AZ9 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with RCI Hospitality and 651639AZ9

The main advantage of trading using opposite RCI Hospitality and 651639AZ9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, 651639AZ9 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 651639AZ9 will offset losses from the drop in 651639AZ9's long position.

The idea behind RCI Hospitality Holdings and NEM 26 15 JUL 32 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.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.