Correlation Between United Homes and RCI Hospitality
Can any of the company-specific risk be diversified away by investing in both United Homes and RCI Hospitality 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 United Homes and RCI Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Homes Group and RCI Hospitality Holdings, you can compare the effects of market volatilities on United Homes and RCI Hospitality 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 United Homes with a short position of RCI Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Homes and RCI Hospitality.
Diversification Opportunities for United Homes and RCI Hospitality
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and RCI is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding United Homes Group and RCI Hospitality Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCI Hospitality Holdings and United Homes 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 United Homes Group are associated (or correlated) with RCI Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCI Hospitality Holdings has no effect on the direction of United Homes i.e., United Homes and RCI Hospitality go up and down completely randomly.
Pair Corralation between United Homes and RCI Hospitality
Considering the 90-day investment horizon United Homes is expected to generate 1.67 times less return on investment than RCI Hospitality. In addition to that, United Homes is 1.55 times more volatile than RCI Hospitality Holdings. It trades about 0.1 of its total potential returns per unit of risk. RCI Hospitality Holdings is currently generating about 0.27 per unit of volatility. If you would invest 4,460 in RCI Hospitality Holdings on August 30, 2024 and sell it today you would earn a total of 744.00 from holding RCI Hospitality Holdings or generate 16.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Homes Group vs. RCI Hospitality Holdings
Performance |
| Timeline |
| United Homes Group |
| RCI Hospitality Holdings |
United Homes and RCI Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Homes and RCI Hospitality
The main advantage of trading using opposite United Homes and RCI Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Homes position performs unexpectedly, RCI Hospitality 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 RCI Hospitality will offset losses from the drop in RCI Hospitality's long position.| United Homes vs. VF Corporation | United Homes vs. Levi Strauss Co | United Homes vs. Under Armour A | United Homes vs. Columbia Sportswear |
| RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |