Correlation Between RCI Hospitality and Jacobs Solutions
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and Jacobs Solutions 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 Jacobs Solutions 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 Jacobs Solutions, you can compare the effects of market volatilities on RCI Hospitality and Jacobs Solutions 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 Jacobs Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and Jacobs Solutions.
Diversification Opportunities for RCI Hospitality and Jacobs Solutions
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between RCI and Jacobs is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and Jacobs Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacobs Solutions 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 Jacobs Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacobs Solutions has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and Jacobs Solutions go up and down completely randomly.
Pair Corralation between RCI Hospitality and Jacobs Solutions
Given the investment horizon of 90 days RCI Hospitality Holdings is expected to generate 0.88 times more return on investment than Jacobs Solutions. However, RCI Hospitality Holdings is 1.14 times less risky than Jacobs Solutions. It trades about 0.08 of its potential returns per unit of risk. Jacobs Solutions is currently generating about -0.19 per unit of risk. If you would invest 5,067 in RCI Hospitality Holdings on September 12, 2024 and sell it today you would earn a total of 142.00 from holding RCI Hospitality Holdings or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCI Hospitality Holdings vs. Jacobs Solutions
Performance |
| Timeline |
| RCI Hospitality Holdings |
| Jacobs Solutions |
RCI Hospitality and Jacobs Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and Jacobs Solutions
The main advantage of trading using opposite RCI Hospitality and Jacobs Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, Jacobs Solutions 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 Jacobs Solutions will offset losses from the drop in Jacobs Solutions' long position.| RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys Corp |
| Jacobs Solutions vs. KBR Inc | Jacobs Solutions vs. Tetra Tech | Jacobs Solutions vs. Fluor | Jacobs Solutions vs. Topbuild 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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