Correlation Between RCI Hospitality and Bright Scholar
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and Bright Scholar 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 RCI Hospitality and Bright Scholar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RCI Hospitality Holdings and Bright Scholar Education, you can compare the effects of market volatilities on RCI Hospitality and Bright Scholar 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 RCI Hospitality with a short position of Bright Scholar. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and Bright Scholar.
Diversification Opportunities for RCI Hospitality and Bright Scholar
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RCI and Bright is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and Bright Scholar Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Scholar Education and RCI Hospitality 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 RCI Hospitality Holdings are associated (or correlated) with Bright Scholar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Scholar Education has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and Bright Scholar go up and down completely randomly.
Pair Corralation between RCI Hospitality and Bright Scholar
Given the investment horizon of 90 days RCI Hospitality Holdings is expected to under-perform the Bright Scholar. But the stock apears to be less risky and, when comparing its historical volatility, RCI Hospitality Holdings is 2.24 times less risky than Bright Scholar. The stock trades about -0.03 of its potential returns per unit of risk. The Bright Scholar Education is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 257.00 in Bright Scholar Education on August 24, 2024 and sell it today you would lose (74.00) from holding Bright Scholar Education or give up 28.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
RCI Hospitality Holdings vs. Bright Scholar Education
Performance |
| Timeline |
| RCI Hospitality Holdings |
| Bright Scholar Education |
RCI Hospitality and Bright Scholar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and Bright Scholar
The main advantage of trading using opposite RCI Hospitality and Bright Scholar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, Bright Scholar 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 Bright Scholar will offset losses from the drop in Bright Scholar's long position.| RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys Corp |
| Bright Scholar vs. Laureate Education | Bright Scholar vs. China Liberal Education | Bright Scholar vs. Adtalem Global Education | Bright Scholar vs. Grand Canyon Education |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |