Correlation Between Jacobs Solutions and RCI Hospitality
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions 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 Jacobs Solutions and RCI Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacobs Solutions and RCI Hospitality Holdings, you can compare the effects of market volatilities on Jacobs Solutions 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 Jacobs Solutions with a short position of RCI Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and RCI Hospitality.
Diversification Opportunities for Jacobs Solutions and RCI Hospitality
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Jacobs and RCI is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions 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 Jacobs Solutions 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 Jacobs Solutions 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 Jacobs Solutions i.e., Jacobs Solutions and RCI Hospitality go up and down completely randomly.
Pair Corralation between Jacobs Solutions and RCI Hospitality
Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 0.53 times more return on investment than RCI Hospitality. However, Jacobs Solutions is 1.9 times less risky than RCI Hospitality. It trades about 0.11 of its potential returns per unit of risk. RCI Hospitality Holdings is currently generating about 0.05 per unit of risk. If you would invest 11,559 in Jacobs Solutions on September 5, 2024 and sell it today you would earn a total of 2,241 from holding Jacobs Solutions or generate 19.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacobs Solutions vs. RCI Hospitality Holdings
Performance |
| Timeline |
| Jacobs Solutions |
| RCI Hospitality Holdings |
Jacobs Solutions and RCI Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacobs Solutions and RCI Hospitality
The main advantage of trading using opposite Jacobs Solutions and RCI Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions 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.| Jacobs Solutions vs. KBR Inc | Jacobs Solutions vs. Tetra Tech | Jacobs Solutions vs. Fluor | Jacobs Solutions vs. Topbuild 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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