Correlation Between RCI Hospitality and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and Samsung Electronics 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 Samsung Electronics 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 Samsung Electronics Co, you can compare the effects of market volatilities on RCI Hospitality and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and Samsung Electronics.
Diversification Opportunities for RCI Hospitality and Samsung Electronics
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RCI and Samsung is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and Samsung Electronics go up and down completely randomly.
Pair Corralation between RCI Hospitality and Samsung Electronics
Assuming the 90 days trading horizon RCI Hospitality Holdings is expected to under-perform the Samsung Electronics. In addition to that, RCI Hospitality is 1.31 times more volatile than Samsung Electronics Co. It trades about -0.03 of its total potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.02 per unit of volatility. If you would invest 110,714 in Samsung Electronics Co on October 27, 2024 and sell it today you would lose (21,914) from holding Samsung Electronics Co or give up 19.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCI Hospitality Holdings vs. Samsung Electronics Co
Performance |
| Timeline |
| RCI Hospitality Holdings |
| Samsung Electronics |
RCI Hospitality and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and Samsung Electronics
The main advantage of trading using opposite RCI Hospitality and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| RCI Hospitality vs. AFFLUENT MEDICAL SAS | RCI Hospitality vs. PEPTONIC MEDICAL | RCI Hospitality vs. CVR Medical Corp | RCI Hospitality vs. Highlight Communications AG |
| Samsung Electronics vs. SPARTAN STORES | Samsung Electronics vs. Compagnie Plastic Omnium | Samsung Electronics vs. Burlington Stores | Samsung Electronics vs. Ross Stores |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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