Correlation Between RCI Hospitality and Tradegate
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and Tradegate 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 Tradegate 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 Tradegate AG Wertpapierhandelsbank, you can compare the effects of market volatilities on RCI Hospitality and Tradegate 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 Tradegate. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and Tradegate.
Diversification Opportunities for RCI Hospitality and Tradegate
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between RCI and Tradegate is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and Tradegate AG Wertpapierhandels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tradegate AG Wertpap 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 Tradegate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tradegate AG Wertpap has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and Tradegate go up and down completely randomly.
Pair Corralation between RCI Hospitality and Tradegate
Assuming the 90 days trading horizon RCI Hospitality Holdings is expected to under-perform the Tradegate. In addition to that, RCI Hospitality is 4.32 times more volatile than Tradegate AG Wertpapierhandelsbank. It trades about -0.07 of its total potential returns per unit of risk. Tradegate AG Wertpapierhandelsbank is currently generating about 0.0 per unit of volatility. If you would invest 8,750 in Tradegate AG Wertpapierhandelsbank on November 6, 2024 and sell it today you would earn a total of 0.00 from holding Tradegate AG Wertpapierhandelsbank or generate 0.0% 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. Tradegate AG Wertpapierhandels
Performance |
| Timeline |
| RCI Hospitality Holdings |
| Tradegate AG Wertpap |
RCI Hospitality and Tradegate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and Tradegate
The main advantage of trading using opposite RCI Hospitality and Tradegate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, Tradegate 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 Tradegate will offset losses from the drop in Tradegate's long position.| RCI Hospitality vs. Cal Maine Foods | RCI Hospitality vs. US FOODS HOLDING | RCI Hospitality vs. The Japan Steel | RCI Hospitality vs. Daido Steel Co |
| Tradegate vs. CVB Financial Corp | Tradegate vs. BOS BETTER ONLINE | Tradegate vs. REVO INSURANCE SPA | Tradegate vs. Meta Financial Group |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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