Correlation Between RCI Hospitality and OPKO HEALTH
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and OPKO HEALTH 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 OPKO HEALTH 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 OPKO HEALTH, you can compare the effects of market volatilities on RCI Hospitality and OPKO HEALTH 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 OPKO HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and OPKO HEALTH.
Diversification Opportunities for RCI Hospitality and OPKO HEALTH
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RCI and OPKO is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and OPKO HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPKO HEALTH 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 OPKO HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPKO HEALTH has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and OPKO HEALTH go up and down completely randomly.
Pair Corralation between RCI Hospitality and OPKO HEALTH
Assuming the 90 days trading horizon RCI Hospitality Holdings is expected to generate 2.73 times more return on investment than OPKO HEALTH. However, RCI Hospitality is 2.73 times more volatile than OPKO HEALTH. It trades about 0.19 of its potential returns per unit of risk. OPKO HEALTH is currently generating about -0.28 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCI Hospitality Holdings vs. OPKO HEALTH
Performance |
| Timeline |
| RCI Hospitality Holdings |
| OPKO HEALTH |
RCI Hospitality and OPKO HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and OPKO HEALTH
The main advantage of trading using opposite RCI Hospitality and OPKO HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, OPKO HEALTH 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 OPKO HEALTH will offset losses from the drop in OPKO HEALTH'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 |
| OPKO HEALTH vs. DEVRY EDUCATION GRP | OPKO HEALTH vs. STRAYER EDUCATION | OPKO HEALTH vs. Take Two Interactive Software | OPKO HEALTH vs. FORMPIPE SOFTWARE AB |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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