Correlation Between RCI Hospitality and Kulicke
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and Kulicke 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 Kulicke 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 Kulicke and Soffa, you can compare the effects of market volatilities on RCI Hospitality and Kulicke 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 Kulicke. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and Kulicke.
Diversification Opportunities for RCI Hospitality and Kulicke
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between RCI and Kulicke is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and Kulicke and Soffa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kulicke and Soffa 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 Kulicke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kulicke and Soffa has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and Kulicke go up and down completely randomly.
Pair Corralation between RCI Hospitality and Kulicke
Given the investment horizon of 90 days RCI Hospitality Holdings is expected to generate 1.09 times more return on investment than Kulicke. However, RCI Hospitality is 1.09 times more volatile than Kulicke and Soffa. It trades about -0.06 of its potential returns per unit of risk. Kulicke and Soffa is currently generating about -0.15 per unit of risk. If you would invest 5,717 in RCI Hospitality Holdings on November 3, 2024 and sell it today you would lose (163.00) from holding RCI Hospitality Holdings or give up 2.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCI Hospitality Holdings vs. Kulicke and Soffa
Performance |
| Timeline |
| RCI Hospitality Holdings |
| Kulicke and Soffa |
RCI Hospitality and Kulicke Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and Kulicke
The main advantage of trading using opposite RCI Hospitality and Kulicke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, Kulicke 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 Kulicke will offset losses from the drop in Kulicke's long position.| RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys Corp |
| Kulicke vs. Ultra Clean Holdings | Kulicke vs. Ichor Holdings | Kulicke vs. Entegris | Kulicke vs. Amtech Systems |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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