Correlation Between RCI Hospitality and Rank
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and Rank 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 Rank 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 The Rank Group, you can compare the effects of market volatilities on RCI Hospitality and Rank 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 Rank. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and Rank.
Diversification Opportunities for RCI Hospitality and Rank
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between RCI and Rank is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and The Rank Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rank Group 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 Rank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rank Group has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and Rank go up and down completely randomly.
Pair Corralation between RCI Hospitality and Rank
Given the investment horizon of 90 days RCI Hospitality Holdings is expected to generate 0.38 times more return on investment than Rank. However, RCI Hospitality Holdings is 2.66 times less risky than Rank. It trades about 0.09 of its potential returns per unit of risk. The Rank Group is currently generating about -0.22 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 163.00 from holding RCI Hospitality Holdings or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
RCI Hospitality Holdings vs. The Rank Group
Performance |
| Timeline |
| RCI Hospitality Holdings |
| Rank Group |
RCI Hospitality and Rank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and Rank
The main advantage of trading using opposite RCI Hospitality and Rank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, Rank 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 Rank will offset losses from the drop in Rank's long position.| RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys Corp |
| Rank vs. MGIC Investment Corp | Rank vs. FiscalNote Holdings | Rank vs. Guangdong Investment Limited | Rank vs. Kaltura |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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