Correlation Between HF Sinclair and RCI Hospitality
Can any of the company-specific risk be diversified away by investing in both HF Sinclair 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 HF Sinclair and RCI Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HF Sinclair Corp and RCI Hospitality Holdings, you can compare the effects of market volatilities on HF Sinclair 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 HF Sinclair with a short position of RCI Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF Sinclair and RCI Hospitality.
Diversification Opportunities for HF Sinclair and RCI Hospitality
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DINO and RCI is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair 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 HF Sinclair 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 HF Sinclair 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 HF Sinclair i.e., HF Sinclair and RCI Hospitality go up and down completely randomly.
Pair Corralation between HF Sinclair and RCI Hospitality
Given the investment horizon of 90 days HF Sinclair Corp is expected to under-perform the RCI Hospitality. But the stock apears to be less risky and, when comparing its historical volatility, HF Sinclair Corp is 1.27 times less risky than RCI Hospitality. The stock trades about -0.03 of its potential returns per unit of risk. The RCI Hospitality Holdings is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 6,162 in RCI Hospitality Holdings on September 4, 2024 and sell it today you would lose (1,079) from holding RCI Hospitality Holdings or give up 17.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HF Sinclair Corp vs. RCI Hospitality Holdings
Performance |
| Timeline |
| HF Sinclair Corp |
| RCI Hospitality Holdings |
HF Sinclair and RCI Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF Sinclair and RCI Hospitality
The main advantage of trading using opposite HF Sinclair and RCI Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF Sinclair 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.| HF Sinclair vs. Delek Energy | HF Sinclair vs. CVR Energy | HF Sinclair vs. Valero Energy | HF Sinclair vs. Marathon Petroleum Corp |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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