Correlation Between RCI Hospitality and SLR Investment
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and SLR Investment 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 SLR Investment 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 SLR Investment Corp, you can compare the effects of market volatilities on RCI Hospitality and SLR Investment 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 SLR Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and SLR Investment.
Diversification Opportunities for RCI Hospitality and SLR Investment
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RCI and SLR is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and SLR Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLR Investment 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 SLR Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLR Investment Corp has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and SLR Investment go up and down completely randomly.
Pair Corralation between RCI Hospitality and SLR Investment
Given the investment horizon of 90 days RCI Hospitality Holdings is expected to generate 3.58 times more return on investment than SLR Investment. However, RCI Hospitality is 3.58 times more volatile than SLR Investment Corp. It trades about 0.11 of its potential returns per unit of risk. SLR Investment Corp is currently generating about 0.13 per unit of risk. If you would invest 5,062 in RCI Hospitality Holdings on November 3, 2024 and sell it today you would earn a total of 492.00 from holding RCI Hospitality Holdings or generate 9.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCI Hospitality Holdings vs. SLR Investment Corp
Performance |
| Timeline |
| RCI Hospitality Holdings |
| SLR Investment Corp |
RCI Hospitality and SLR Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and SLR Investment
The main advantage of trading using opposite RCI Hospitality and SLR Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, SLR Investment 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 SLR Investment will offset losses from the drop in SLR Investment's long position.| RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys Corp |
| SLR Investment vs. Horizon Technology Finance | SLR Investment vs. WhiteHorse Finance | SLR Investment vs. Gladstone Capital | SLR Investment vs. PennantPark Floating Rate |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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