Correlation Between RCI Hospitality and Hafnia
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and Hafnia 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 Hafnia 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 Hafnia Limited, you can compare the effects of market volatilities on RCI Hospitality and Hafnia 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 Hafnia. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and Hafnia.
Diversification Opportunities for RCI Hospitality and Hafnia
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RCI and Hafnia is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia 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 Hafnia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hafnia Limited has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and Hafnia go up and down completely randomly.
Pair Corralation between RCI Hospitality and Hafnia
Given the investment horizon of 90 days RCI Hospitality Holdings is expected to generate 1.18 times more return on investment than Hafnia. However, RCI Hospitality is 1.18 times more volatile than Hafnia Limited. It trades about -0.02 of its potential returns per unit of risk. Hafnia Limited is currently generating about -0.03 per unit of risk. If you would invest 6,152 in RCI Hospitality Holdings on August 28, 2024 and sell it today you would lose (831.00) from holding RCI Hospitality Holdings or give up 13.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.52% |
| Values | Daily Returns |
RCI Hospitality Holdings vs. Hafnia Limited
Performance |
| Timeline |
| RCI Hospitality Holdings |
| Hafnia Limited |
RCI Hospitality and Hafnia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and Hafnia
The main advantage of trading using opposite RCI Hospitality and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, Hafnia 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 Hafnia will offset losses from the drop in Hafnia's long position.| RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys Corp |
| Hafnia vs. The Gap, | Hafnia vs. Boot Barn Holdings | Hafnia vs. National Beverage Corp | Hafnia vs. Kontoor Brands |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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