Correlation Between RCI Hospitality and Warner Music
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and Warner Music 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 Warner Music 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 Warner Music Group, you can compare the effects of market volatilities on RCI Hospitality and Warner Music 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 Warner Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and Warner Music.
Diversification Opportunities for RCI Hospitality and Warner Music
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RCI and Warner is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and Warner Music Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warner Music 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 Warner Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warner Music Group has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and Warner Music go up and down completely randomly.
Pair Corralation between RCI Hospitality and Warner Music
Assuming the 90 days trading horizon RCI Hospitality Holdings is expected to under-perform the Warner Music. In addition to that, RCI Hospitality is 1.15 times more volatile than Warner Music Group. It trades about -0.27 of its total potential returns per unit of risk. Warner Music Group is currently generating about 0.25 per unit of volatility. If you would invest 3,000 in Warner Music Group on November 30, 2024 and sell it today you would earn a total of 308.00 from holding Warner Music Group or generate 10.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
RCI Hospitality Holdings vs. Warner Music Group
Performance |
Timeline |
RCI Hospitality Holdings |
Warner Music Group |
RCI Hospitality and Warner Music Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with RCI Hospitality and Warner Music
The main advantage of trading using opposite RCI Hospitality and Warner Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, Warner Music 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 Warner Music will offset losses from the drop in Warner Music's long position.RCI Hospitality vs. WT OFFSHORE | ||
RCI Hospitality vs. Haverty Furniture Companies | ||
RCI Hospitality vs. SBM OFFSHORE | ||
RCI Hospitality vs. Solstad Offshore ASA |
Warner Music vs. DETALION GAMES SA | ||
Warner Music vs. Molson Coors Beverage | ||
Warner Music vs. UNIVERSAL MUSIC GROUP | ||
Warner Music vs. MOVIE GAMES SA |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |