Correlation Between RCI Hospitality and Western Copper
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and Western Copper 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 Western Copper 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 Western Copper and, you can compare the effects of market volatilities on RCI Hospitality and Western Copper 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 Western Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and Western Copper.
Diversification Opportunities for RCI Hospitality and Western Copper
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RCI and Western is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper 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 Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and Western Copper go up and down completely randomly.
Pair Corralation between RCI Hospitality and Western Copper
Given the investment horizon of 90 days RCI Hospitality Holdings is expected to generate 1.72 times more return on investment than Western Copper. However, RCI Hospitality is 1.72 times more volatile than Western Copper and. It trades about 0.29 of its potential returns per unit of risk. Western Copper and is currently generating about -0.19 per unit of risk. If you would invest 4,900 in RCI Hospitality Holdings on September 19, 2024 and sell it today you would earn a total of 904.00 from holding RCI Hospitality Holdings or generate 18.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCI Hospitality Holdings vs. Western Copper and
Performance |
| Timeline |
| RCI Hospitality Holdings |
| Western Copper |
RCI Hospitality and Western Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and Western Copper
The main advantage of trading using opposite RCI Hospitality and Western Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, Western Copper 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 Western Copper will offset losses from the drop in Western Copper's long position.| RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys Corp |
| Western Copper vs. Vale SA ADR | Western Copper vs. Electra Battery Materials | Western Copper vs. Foremost Lithium Resource | Western Copper vs. Brazil Potash Corp |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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