Correlation Between RCI Hospitality and Pinstripes Holdings
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and Pinstripes Holdings 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 Pinstripes Holdings 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 Pinstripes Holdings, you can compare the effects of market volatilities on RCI Hospitality and Pinstripes Holdings 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 Pinstripes Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and Pinstripes Holdings.
Diversification Opportunities for RCI Hospitality and Pinstripes Holdings
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RCI and Pinstripes is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and Pinstripes Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinstripes Holdings 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 Pinstripes Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinstripes Holdings has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and Pinstripes Holdings go up and down completely randomly.
Pair Corralation between RCI Hospitality and Pinstripes Holdings
Given the investment horizon of 90 days RCI Hospitality Holdings is expected to generate 0.32 times more return on investment than Pinstripes Holdings. However, RCI Hospitality Holdings is 3.15 times less risky than Pinstripes Holdings. It trades about 0.05 of its potential returns per unit of risk. Pinstripes Holdings is currently generating about -0.14 per unit of risk. If you would invest 4,839 in RCI Hospitality Holdings on October 26, 2024 and sell it today you would earn a total of 602.00 from holding RCI Hospitality Holdings or generate 12.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCI Hospitality Holdings vs. Pinstripes Holdings
Performance |
| Timeline |
| RCI Hospitality Holdings |
| Pinstripes Holdings |
RCI Hospitality and Pinstripes Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and Pinstripes Holdings
The main advantage of trading using opposite RCI Hospitality and Pinstripes Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, Pinstripes Holdings 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 Pinstripes Holdings will offset losses from the drop in Pinstripes Holdings' long position.| RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys Corp |
| Pinstripes Holdings vs. Summit Hotel Properties | Pinstripes Holdings vs. Starbucks | Pinstripes Holdings vs. CECO Environmental Corp | Pinstripes Holdings vs. BJs Restaurants |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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