Correlation Between RCI Hospitality and Agricultural Bank

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

Diversification Opportunities for RCI Hospitality and Agricultural Bank

-0.6

Correlation Coefficient

RCI Hospitality  Agricultural Bank

Excellent diversification

The 3 months correlation between RCI and Agricultural is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and Agricultural Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agricultural Bank 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 Agricultural Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agricultural Bank has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and Agricultural Bank go up and down completely randomly.

Pair Corralation between RCI Hospitality and Agricultural Bank

Assuming the 90 days trading horizon RCI Hospitality Holdings is expected to under-perform the Agricultural Bank. But the stock apears to be less risky and, when comparing its historical volatility, RCI Hospitality Holdings is 2.23 times less risky than Agricultural Bank. The stock trades about -0.25 of its potential returns per unit of risk. The Agricultural Bank of is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  41.00  in Agricultural Bank of on December 24, 2024 and sell it today you would earn a total of  17.00  from holding Agricultural Bank of or generate 41.46% return on investment over 90 days.

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

RCI Hospitality Holdings  vs.  Agricultural Bank of

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. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Agricultural Bank

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Agricultural Bank of are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Agricultural Bank reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RCI Hospitality and Agricultural Bank

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

The idea behind RCI Hospitality Holdings and Agricultural Bank of 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.