Correlation Between RCI Hospitality and Christian Dior
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and Christian Dior 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 Christian Dior 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 Christian Dior SE, you can compare the effects of market volatilities on RCI Hospitality and Christian Dior 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 Christian Dior. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and Christian Dior.
Diversification Opportunities for RCI Hospitality and Christian Dior
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between RCI and Christian is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and Christian Dior SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Christian Dior SE 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 Christian Dior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Christian Dior SE has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and Christian Dior go up and down completely randomly.
Pair Corralation between RCI Hospitality and Christian Dior
Assuming the 90 days trading horizon RCI Hospitality is expected to generate 2.0 times less return on investment than Christian Dior. In addition to that, RCI Hospitality is 1.02 times more volatile than Christian Dior SE. It trades about 0.13 of its total potential returns per unit of risk. Christian Dior SE is currently generating about 0.26 per unit of volatility. If you would invest 54,400 in Christian Dior SE on October 30, 2024 and sell it today you would earn a total of 12,000 from holding Christian Dior SE or generate 22.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCI Hospitality Holdings vs. Christian Dior SE
Performance |
| Timeline |
| RCI Hospitality Holdings |
| Christian Dior SE |
RCI Hospitality and Christian Dior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and Christian Dior
The main advantage of trading using opposite RCI Hospitality and Christian Dior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, Christian Dior 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 Christian Dior will offset losses from the drop in Christian Dior's long position.| RCI Hospitality vs. Reinsurance Group of | RCI Hospitality vs. Universal Insurance Holdings | RCI Hospitality vs. UNIQA INSURANCE GR | RCI Hospitality vs. HOME DEPOT |
| Christian Dior vs. LVMH Mot Hennessy | Christian Dior vs. LVMH Mot Hennessy | Christian Dior vs. LVMH Mot Hennessy | Christian Dior vs. Herms International Socit |
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 Stocks Directory module to find actively traded stocks across global markets.
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