Correlation Between RCI Hospitality and SLR Investment
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and SLR Investment 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 SLR Investment 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 SLR Investment Corp, you can compare the effects of market volatilities on RCI Hospitality and SLR Investment 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 SLR Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and SLR Investment.
Diversification Opportunities for RCI Hospitality and SLR Investment
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between RCI and SLR is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and SLR Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLR Investment Corp 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 SLR Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLR Investment Corp has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and SLR Investment go up and down completely randomly.
Pair Corralation between RCI Hospitality and SLR Investment
Assuming the 90 days trading horizon RCI Hospitality Holdings is expected to under-perform the SLR Investment. In addition to that, RCI Hospitality is 1.6 times more volatile than SLR Investment Corp. It trades about -0.29 of its total potential returns per unit of risk. SLR Investment Corp is currently generating about 0.09 per unit of volatility. If you would invest 1,571 in SLR Investment Corp on October 28, 2024 and sell it today you would earn a total of 21.00 from holding SLR Investment Corp or generate 1.34% 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. SLR Investment Corp
Performance |
| Timeline |
| RCI Hospitality Holdings |
| SLR Investment Corp |
RCI Hospitality and SLR Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and SLR Investment
The main advantage of trading using opposite RCI Hospitality and SLR Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, SLR Investment 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 SLR Investment will offset losses from the drop in SLR Investment's long position.| RCI Hospitality vs. Tradegate AG Wertpapierhandelsbank | RCI Hospitality vs. CARSALESCOM | RCI Hospitality vs. FLOW TRADERS LTD | RCI Hospitality vs. MARKET VECTR RETAIL |
| SLR Investment vs. KOBE STEEL LTD | SLR Investment vs. Mount Gibson Iron | SLR Investment vs. RELIANCE STEEL AL | SLR Investment vs. CREO MEDICAL GRP |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |