Correlation Between RCI Hospitality and AFFLUENT MEDICAL

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and AFFLUENT MEDICAL 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 AFFLUENT MEDICAL 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 AFFLUENT MEDICAL SAS, you can compare the effects of market volatilities on RCI Hospitality and AFFLUENT MEDICAL 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 AFFLUENT MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and AFFLUENT MEDICAL.

Diversification Opportunities for RCI Hospitality and AFFLUENT MEDICAL

-0.72
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between RCI and AFFLUENT is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and AFFLUENT MEDICAL SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFFLUENT MEDICAL SAS 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 AFFLUENT MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFFLUENT MEDICAL SAS has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and AFFLUENT MEDICAL go up and down completely randomly.

Pair Corralation between RCI Hospitality and AFFLUENT MEDICAL

Assuming the 90 days trading horizon RCI Hospitality Holdings is expected to under-perform the AFFLUENT MEDICAL. But the stock apears to be less risky and, when comparing its historical volatility, RCI Hospitality Holdings is 3.12 times less risky than AFFLUENT MEDICAL. The stock trades about -0.29 of its potential returns per unit of risk. The AFFLUENT MEDICAL SAS is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  135.00  in AFFLUENT MEDICAL SAS on October 28, 2024 and sell it today you would lose (10.00) from holding AFFLUENT MEDICAL SAS or give up 7.41% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

RCI Hospitality Holdings  vs.  AFFLUENT MEDICAL SAS

 Performance 
       Timeline  
RCI Hospitality Holdings 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in RCI Hospitality Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, RCI Hospitality unveiled solid returns over the last few months and may actually be approaching a breakup point.
AFFLUENT MEDICAL SAS 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AFFLUENT MEDICAL SAS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

RCI Hospitality and AFFLUENT MEDICAL Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with RCI Hospitality and AFFLUENT MEDICAL

The main advantage of trading using opposite RCI Hospitality and AFFLUENT MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, AFFLUENT MEDICAL 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 AFFLUENT MEDICAL will offset losses from the drop in AFFLUENT MEDICAL's long position.
The idea behind RCI Hospitality Holdings and AFFLUENT MEDICAL SAS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

Other Complementary Tools

Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Economic Indicators
Top statistical indicators that provide insights into how an economy is performing