Correlation Between RCI Hospitality and Getty Realty
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and Getty Realty 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 Getty Realty 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 Getty Realty, you can compare the effects of market volatilities on RCI Hospitality and Getty Realty 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 Getty Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and Getty Realty.
Diversification Opportunities for RCI Hospitality and Getty Realty
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RCI and Getty is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and Getty Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Realty 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 Getty Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Realty has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and Getty Realty go up and down completely randomly.
Pair Corralation between RCI Hospitality and Getty Realty
Given the investment horizon of 90 days RCI Hospitality Holdings is expected to under-perform the Getty Realty. In addition to that, RCI Hospitality is 1.93 times more volatile than Getty Realty. It trades about -0.01 of its total potential returns per unit of risk. Getty Realty is currently generating about 0.07 per unit of volatility. If you would invest 2,598 in Getty Realty on September 4, 2024 and sell it today you would earn a total of 669.00 from holding Getty Realty or generate 25.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCI Hospitality Holdings vs. Getty Realty
Performance |
| Timeline |
| RCI Hospitality Holdings |
| Getty Realty |
RCI Hospitality and Getty Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and Getty Realty
The main advantage of trading using opposite RCI Hospitality and Getty Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, Getty Realty 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 Getty Realty will offset losses from the drop in Getty Realty's long position.| RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys Corp |
| Getty Realty vs. Regency Centers | Getty Realty vs. Site Centers Corp | Getty Realty vs. Brixmor Property | Getty Realty vs. Tanger Factory Outlet |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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