Correlation Between SP 500 and RCI Hospitality
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By analyzing existing cross correlation between SP 500 Retailing and RCI Hospitality Holdings, you can compare the effects of market volatilities on SP 500 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 SP 500 with a short position of RCI Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP 500 and RCI Hospitality.
Diversification Opportunities for SP 500 and RCI Hospitality
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 5SP2550 and RCI is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding SP 500 Retailing 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 SP 500 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 SP 500 Retailing 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 SP 500 i.e., SP 500 and RCI Hospitality go up and down completely randomly.
Pair Corralation between SP 500 and RCI Hospitality
Assuming the 90 days trading horizon SP 500 Retailing is expected to generate 0.59 times more return on investment than RCI Hospitality. However, SP 500 Retailing is 1.69 times less risky than RCI Hospitality. It trades about 0.1 of its potential returns per unit of risk. RCI Hospitality Holdings is currently generating about -0.04 per unit of risk. If you would invest 283,561 in SP 500 Retailing on September 5, 2024 and sell it today you would earn a total of 224,365 from holding SP 500 Retailing or generate 79.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.39% |
| Values | Daily Returns |
SP 500 Retailing vs. RCI Hospitality Holdings
Performance |
| Timeline |
SP 500 and RCI Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
SP 500 Retailing
Pair trading matchups for SP 500
RCI Hospitality Holdings
Pair trading matchups for RCI Hospitality
Pair Trading with SP 500 and RCI Hospitality
The main advantage of trading using opposite SP 500 and RCI Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP 500 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.| SP 500 vs. RCI Hospitality Holdings | SP 500 vs. Analog Devices | SP 500 vs. Dennys Corp | SP 500 vs. KVH Industries |
| RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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