Correlation Between RCI Hospitality and Yuexiu Transport
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and Yuexiu Transport 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 Yuexiu Transport 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 Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on RCI Hospitality and Yuexiu Transport 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 Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and Yuexiu Transport.
Diversification Opportunities for RCI Hospitality and Yuexiu Transport
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between RCI and Yuexiu is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and Yuexiu Transport Infrastructur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuexiu Transport Inf 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 Yuexiu Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuexiu Transport Inf has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and Yuexiu Transport go up and down completely randomly.
Pair Corralation between RCI Hospitality and Yuexiu Transport
Given the investment horizon of 90 days RCI Hospitality Holdings is expected to under-perform the Yuexiu Transport. But the stock apears to be less risky and, when comparing its historical volatility, RCI Hospitality Holdings is 1.21 times less risky than Yuexiu Transport. The stock trades about -0.02 of its potential returns per unit of risk. The Yuexiu Transport Infrastructure is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 32.00 in Yuexiu Transport Infrastructure on August 28, 2024 and sell it today you would earn a total of 26.00 from holding Yuexiu Transport Infrastructure or generate 81.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.52% |
| Values | Daily Returns |
RCI Hospitality Holdings vs. Yuexiu Transport Infrastructur
Performance |
| Timeline |
| RCI Hospitality Holdings |
| Yuexiu Transport Inf |
RCI Hospitality and Yuexiu Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and Yuexiu Transport
The main advantage of trading using opposite RCI Hospitality and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, Yuexiu Transport 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 Yuexiu Transport will offset losses from the drop in Yuexiu Transport's long position.| RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys Corp |
| Yuexiu Transport vs. Zhejiang Expressway Co | Yuexiu Transport vs. Jiangsu Expressway Co | Yuexiu Transport vs. Jiangsu Expressway | Yuexiu Transport vs. Verra Mobility 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |