Correlation Between RCI Hospitality and CONOCOPHILLIPS

Can any of the company-specific risk be diversified away by investing in both RCI Hospitality and CONOCOPHILLIPS 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 CONOCOPHILLIPS 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 CONOCOPHILLIPS 335 percent, you can compare the effects of market volatilities on RCI Hospitality and CONOCOPHILLIPS 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 CONOCOPHILLIPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and CONOCOPHILLIPS.

Diversification Opportunities for RCI Hospitality and CONOCOPHILLIPS

0.17

Correlation Coefficient

RCI Hospitality  CONOCOPHILLIPS

Average diversification

The 3 months correlation between RCI and CONOCOPHILLIPS is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and CONOCOPHILLIPS 335 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONOCOPHILLIPS 335 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 CONOCOPHILLIPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONOCOPHILLIPS 335 has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and CONOCOPHILLIPS go up and down completely randomly.

Pair Corralation between RCI Hospitality and CONOCOPHILLIPS

Given the investment horizon of 90 days RCI Hospitality Holdings is expected to generate 4.37 times more return on investment than CONOCOPHILLIPS. However, RCI Hospitality is 4.37 times more volatile than CONOCOPHILLIPS 335 percent. It trades about 0.13 of its potential returns per unit of risk. CONOCOPHILLIPS 335 percent is currently generating about -0.07 per unit of risk. If you would invest  4,443  in RCI Hospitality Holdings on September 14, 2024 and sell it today you would earn a total of  787.00  from holding RCI Hospitality Holdings or generate 17.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	49.21%
Values	Daily Returns

RCI Hospitality Holdings  vs.  CONOCOPHILLIPS 335 percent

RCI Hospitality Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in RCI Hospitality Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain fundamental indicators, RCI Hospitality disclosed solid returns over the last few months and may actually be approaching a breakup point.

CONOCOPHILLIPS 335

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CONOCOPHILLIPS 335 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CONOCOPHILLIPS is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with RCI Hospitality and CONOCOPHILLIPS

The main advantage of trading using opposite RCI Hospitality and CONOCOPHILLIPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality position performs unexpectedly, CONOCOPHILLIPS 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 CONOCOPHILLIPS will offset losses from the drop in CONOCOPHILLIPS's long position.

The idea behind RCI Hospitality Holdings and CONOCOPHILLIPS 335 percent pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.