Correlation Between RCI Hospitality and GameStop Corp
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and GameStop Corp 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 GameStop Corp 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 GameStop Corp, you can compare the effects of market volatilities on RCI Hospitality and GameStop Corp 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 GameStop Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and GameStop Corp.
Diversification Opportunities for RCI Hospitality and GameStop Corp
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between RCI and GameStop is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and GameStop Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameStop Corp 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 GameStop Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GameStop Corp has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and GameStop Corp go up and down completely randomly.
Pair Corralation between RCI Hospitality and GameStop Corp
Given the investment horizon of 90 days RCI Hospitality Holdings is expected to under-perform the GameStop Corp. But the stock apears to be less risky and, when comparing its historical volatility, RCI Hospitality Holdings is 3.96 times less risky than GameStop Corp. The stock trades about -0.03 of its potential returns per unit of risk. The GameStop Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,772 in GameStop Corp on September 14, 2024 and sell it today you would earn a total of 1,095 from holding GameStop Corp or generate 61.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCI Hospitality Holdings vs. GameStop Corp
Performance |
| Timeline |
| RCI Hospitality Holdings |
| GameStop Corp |
RCI Hospitality and GameStop Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and GameStop Corp
The main advantage of trading using opposite RCI Hospitality and GameStop Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, GameStop Corp 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 GameStop Corp will offset losses from the drop in GameStop Corp's long position.| RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys Corp |
| GameStop Corp vs. Arhaus Inc | GameStop Corp vs. Floor Decor Holdings | GameStop Corp vs. Live Ventures | GameStop Corp vs. Macys Inc |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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