Correlation Between RCI Hospitality and NORFOLK
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By analyzing existing cross correlation between RCI Hospitality Holdings and NORFOLK SOUTHN P, you can compare the effects of market volatilities on RCI Hospitality and NORFOLK 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 NORFOLK. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and NORFOLK.
Diversification Opportunities for RCI Hospitality and NORFOLK
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between RCI and NORFOLK is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and NORFOLK SOUTHN P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORFOLK SOUTHN P 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 NORFOLK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORFOLK SOUTHN P has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and NORFOLK go up and down completely randomly.
Pair Corralation between RCI Hospitality and NORFOLK
Given the investment horizon of 90 days RCI Hospitality Holdings is expected to generate 3.95 times more return on investment than NORFOLK. However, RCI Hospitality is 3.95 times more volatile than NORFOLK SOUTHN P. It trades about 0.18 of its potential returns per unit of risk. NORFOLK SOUTHN P is currently generating about -0.06 per unit of risk. If you would invest 5,274 in RCI Hospitality Holdings on October 9, 2024 and sell it today you would earn a total of 490.00 from holding RCI Hospitality Holdings or generate 9.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 52.63% |
| Values | Daily Returns |
RCI Hospitality Holdings vs. NORFOLK SOUTHN P
Performance |
| Timeline |
| RCI Hospitality Holdings |
| NORFOLK SOUTHN P |
RCI Hospitality and NORFOLK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and NORFOLK
The main advantage of trading using opposite RCI Hospitality and NORFOLK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, NORFOLK 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 NORFOLK will offset losses from the drop in NORFOLK's long position.| RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys Corp |
| NORFOLK vs. Air Lease | NORFOLK vs. AerCap Holdings NV | NORFOLK vs. Flexible Solutions International | NORFOLK vs. Hertz Global Hldgs |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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