Correlation Between Acadia Healthcare and RCI Hospitality
Can any of the company-specific risk be diversified away by investing in both Acadia Healthcare and RCI Hospitality 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 Acadia Healthcare and RCI Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acadia Healthcare and RCI Hospitality Holdings, you can compare the effects of market volatilities on Acadia Healthcare 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 Acadia Healthcare with a short position of RCI Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Healthcare and RCI Hospitality.
Diversification Opportunities for Acadia Healthcare and RCI Hospitality
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Acadia and RCI is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Healthcare 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 Acadia Healthcare 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 Acadia Healthcare 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 Acadia Healthcare i.e., Acadia Healthcare and RCI Hospitality go up and down completely randomly.
Pair Corralation between Acadia Healthcare and RCI Hospitality
Assuming the 90 days horizon Acadia Healthcare is expected to generate 1.07 times more return on investment than RCI Hospitality. However, Acadia Healthcare is 1.07 times more volatile than RCI Hospitality Holdings. It trades about 0.36 of its potential returns per unit of risk. RCI Hospitality Holdings is currently generating about 0.22 per unit of risk. If you would invest 3,740 in Acadia Healthcare on October 11, 2024 and sell it today you would earn a total of 700.00 from holding Acadia Healthcare or generate 18.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acadia Healthcare vs. RCI Hospitality Holdings
Performance |
| Timeline |
| Acadia Healthcare |
| RCI Hospitality Holdings |
Acadia Healthcare and RCI Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acadia Healthcare and RCI Hospitality
The main advantage of trading using opposite Acadia Healthcare and RCI Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Healthcare 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.| Acadia Healthcare vs. BC IRON | Acadia Healthcare vs. Monument Mining Limited | Acadia Healthcare vs. Dentsply Sirona | Acadia Healthcare vs. Nippon Steel |
| RCI Hospitality vs. COPLAND ROAD CAPITAL | RCI Hospitality vs. Broadcom | RCI Hospitality vs. Harmony Gold Mining | RCI Hospitality vs. ADRIATIC METALS LS 013355 |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |