Correlation Between RCI Hospitality and Mayfair Gold
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and Mayfair Gold 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 Mayfair Gold 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 Mayfair Gold Corp, you can compare the effects of market volatilities on RCI Hospitality and Mayfair Gold 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 Mayfair Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and Mayfair Gold.
Diversification Opportunities for RCI Hospitality and Mayfair Gold
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between RCI and Mayfair is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and Mayfair Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mayfair Gold Corp 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 Mayfair Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mayfair Gold Corp has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and Mayfair Gold go up and down completely randomly.
Pair Corralation between RCI Hospitality and Mayfair Gold
Given the investment horizon of 90 days RCI Hospitality Holdings is expected to under-perform the Mayfair Gold. But the stock apears to be less risky and, when comparing its historical volatility, RCI Hospitality Holdings is 1.1 times less risky than Mayfair Gold. The stock trades about -0.03 of its potential returns per unit of risk. The Mayfair Gold Corp is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 169.00 in Mayfair Gold Corp on October 23, 2024 and sell it today you would lose (47.00) from holding Mayfair Gold Corp or give up 27.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
RCI Hospitality Holdings vs. Mayfair Gold Corp
Performance |
| Timeline |
| RCI Hospitality Holdings |
| Mayfair Gold Corp |
RCI Hospitality and Mayfair Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and Mayfair Gold
The main advantage of trading using opposite RCI Hospitality and Mayfair Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, Mayfair Gold 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 Mayfair Gold will offset losses from the drop in Mayfair Gold's long position.| RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys Corp |
| Mayfair Gold vs. Agnico Eagle Mines | Mayfair Gold vs. B2Gold Corp | Mayfair Gold vs. Pan American Silver | Mayfair Gold vs. Gold Fields Ltd |
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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