Correlation Between RCI Hospitality and QBE Insurance
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and QBE Insurance 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 QBE Insurance 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 QBE Insurance Group, you can compare the effects of market volatilities on RCI Hospitality and QBE Insurance 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 QBE Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and QBE Insurance.
Diversification Opportunities for RCI Hospitality and QBE Insurance
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between RCI and QBE is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and QBE Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QBE Insurance Group 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 QBE Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QBE Insurance Group has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and QBE Insurance go up and down completely randomly.
Pair Corralation between RCI Hospitality and QBE Insurance
Assuming the 90 days trading horizon RCI Hospitality Holdings is expected to generate 2.65 times more return on investment than QBE Insurance. However, RCI Hospitality is 2.65 times more volatile than QBE Insurance Group. It trades about 0.19 of its potential returns per unit of risk. QBE Insurance Group is currently generating about 0.26 per unit of risk. If you would invest 5,033 in RCI Hospitality Holdings on October 12, 2024 and sell it today you would earn a total of 417.00 from holding RCI Hospitality Holdings or generate 8.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCI Hospitality Holdings vs. QBE Insurance Group
Performance |
| Timeline |
| RCI Hospitality Holdings |
| QBE Insurance Group |
RCI Hospitality and QBE Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and QBE Insurance
The main advantage of trading using opposite RCI Hospitality and QBE Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, QBE Insurance 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 QBE Insurance will offset losses from the drop in QBE Insurance's long position.| RCI Hospitality vs. COPLAND ROAD CAPITAL | RCI Hospitality vs. Broadcom | RCI Hospitality vs. Harmony Gold Mining | RCI Hospitality vs. ADRIATIC METALS LS 013355 |
| QBE Insurance vs. OURGAME INTHOLDL 00005 | QBE Insurance vs. DETALION GAMES SA | QBE Insurance vs. Suntory Beverage Food | QBE Insurance vs. PENN NATL GAMING |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |