Correlation Between RCI Hospitality and Playtika Holding
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and Playtika Holding 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 Playtika Holding 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 Playtika Holding Corp, you can compare the effects of market volatilities on RCI Hospitality and Playtika Holding 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 Playtika Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and Playtika Holding.
Diversification Opportunities for RCI Hospitality and Playtika Holding
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between RCI and Playtika is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and Playtika Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtika Holding 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 Playtika Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtika Holding Corp has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and Playtika Holding go up and down completely randomly.
Pair Corralation between RCI Hospitality and Playtika Holding
Given the investment horizon of 90 days RCI Hospitality Holdings is expected to generate 1.3 times more return on investment than Playtika Holding. However, RCI Hospitality is 1.3 times more volatile than Playtika Holding Corp. It trades about 0.06 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about -0.12 per unit of risk. If you would invest 5,106 in RCI Hospitality Holdings on September 13, 2024 and sell it today you would earn a total of 103.00 from holding RCI Hospitality Holdings or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCI Hospitality Holdings vs. Playtika Holding Corp
Performance |
| Timeline |
| RCI Hospitality Holdings |
| Playtika Holding Corp |
RCI Hospitality and Playtika Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and Playtika Holding
The main advantage of trading using opposite RCI Hospitality and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, Playtika Holding 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 Playtika Holding will offset losses from the drop in Playtika Holding's long position.| RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys Corp |
| Playtika Holding vs. SohuCom | Playtika Holding vs. Playstudios | Playtika Holding vs. NetEase | Playtika Holding vs. Golden Matrix Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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