Correlation Between AerSale Corp and RCI Hospitality
Can any of the company-specific risk be diversified away by investing in both AerSale Corp 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 AerSale Corp and RCI Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerSale Corp and RCI Hospitality Holdings, you can compare the effects of market volatilities on AerSale Corp 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 AerSale Corp with a short position of RCI Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerSale Corp and RCI Hospitality.
Diversification Opportunities for AerSale Corp and RCI Hospitality
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AerSale and RCI is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp 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 AerSale Corp 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 AerSale Corp 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 AerSale Corp i.e., AerSale Corp and RCI Hospitality go up and down completely randomly.
Pair Corralation between AerSale Corp and RCI Hospitality
Given the investment horizon of 90 days AerSale Corp is expected to generate 1.12 times less return on investment than RCI Hospitality. But when comparing it to its historical volatility, AerSale Corp is 1.01 times less risky than RCI Hospitality. It trades about 0.23 of its potential returns per unit of risk. RCI Hospitality Holdings is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 4,460 in RCI Hospitality Holdings on August 30, 2024 and sell it today you would earn a total of 744.00 from holding RCI Hospitality Holdings or generate 16.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AerSale Corp vs. RCI Hospitality Holdings
Performance |
| Timeline |
| AerSale Corp |
| RCI Hospitality Holdings |
AerSale Corp and RCI Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerSale Corp and RCI Hospitality
The main advantage of trading using opposite AerSale Corp and RCI Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerSale Corp 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.| AerSale Corp vs. Grupo Aeroportuario del | AerSale Corp vs. Grupo Aeroportuario del | AerSale Corp vs. Corporacion America Airports | AerSale Corp vs. Aeroports de Paris |
| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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