Correlation Between United Natural and RCI Hospitality
Can any of the company-specific risk be diversified away by investing in both United Natural 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 Natural 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 Natural Foods and RCI Hospitality Holdings, you can compare the effects of market volatilities on United Natural 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 Natural with a short position of RCI Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and RCI Hospitality.
Diversification Opportunities for United Natural and RCI Hospitality
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and RCI is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods 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 Natural 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 Natural Foods 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 Natural i.e., United Natural and RCI Hospitality go up and down completely randomly.
Pair Corralation between United Natural and RCI Hospitality
Assuming the 90 days horizon United Natural Foods is expected to under-perform the RCI Hospitality. In addition to that, United Natural is 1.01 times more volatile than RCI Hospitality Holdings. It trades about -0.02 of its total potential returns per unit of risk. RCI Hospitality Holdings is currently generating about 0.18 per unit of volatility. 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 | Strong |
| Accuracy | 94.44% |
| Values | Daily Returns |
United Natural Foods vs. RCI Hospitality Holdings
Performance |
| Timeline |
| United Natural Foods |
| RCI Hospitality Holdings |
United Natural and RCI Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and RCI Hospitality
The main advantage of trading using opposite United Natural and RCI Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural 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 Natural vs. US Foods Holding | United Natural vs. Axfood AB | United Natural vs. Superior Plus Corp | United Natural vs. NMI Holdings |
| RCI Hospitality vs. TYSON FOODS A | RCI Hospitality vs. Soken Chemical Engineering | RCI Hospitality vs. SENECA FOODS A | RCI Hospitality vs. United Natural Foods |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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