Correlation Between RCI Hospitality and EcoGraf
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and EcoGraf 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 EcoGraf 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 EcoGraf Limited, you can compare the effects of market volatilities on RCI Hospitality and EcoGraf 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 EcoGraf. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and EcoGraf.
Diversification Opportunities for RCI Hospitality and EcoGraf
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between RCI and EcoGraf is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and EcoGraf Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EcoGraf Limited 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 EcoGraf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EcoGraf Limited has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and EcoGraf go up and down completely randomly.
Pair Corralation between RCI Hospitality and EcoGraf
Given the investment horizon of 90 days RCI Hospitality Holdings is expected to generate 0.46 times more return on investment than EcoGraf. However, RCI Hospitality Holdings is 2.18 times less risky than EcoGraf. It trades about -0.04 of its potential returns per unit of risk. EcoGraf Limited is currently generating about -0.06 per unit of risk. If you would invest 9,185 in RCI Hospitality Holdings on September 12, 2024 and sell it today you would lose (3,976) from holding RCI Hospitality Holdings or give up 43.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
RCI Hospitality Holdings vs. EcoGraf Limited
Performance |
| Timeline |
| RCI Hospitality Holdings |
| EcoGraf Limited |
RCI Hospitality and EcoGraf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and EcoGraf
The main advantage of trading using opposite RCI Hospitality and EcoGraf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, EcoGraf 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 EcoGraf will offset losses from the drop in EcoGraf's long position.| RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys Corp |
| EcoGraf vs. Keurig Dr Pepper | EcoGraf vs. RCI Hospitality Holdings | EcoGraf vs. Anheuser Busch Inbev | EcoGraf vs. The Cheesecake Factory |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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