Correlation Between Apple and RCI Hospitality

Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and RCI Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apple Inc and RCI Hospitality Holdings, you can compare the effects of market volatilities on Apple 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 Apple with a short position of RCI Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and RCI Hospitality.

Diversification Opportunities for Apple and RCI Hospitality

0.54

Correlation Coefficient

Apple  RCI Hospitality

Very weak diversification

The 3 months correlation between Apple and RCI is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc 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 Apple 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 Apple Inc 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 Apple i.e., Apple and RCI Hospitality go up and down completely randomly.

Pair Corralation between Apple and RCI Hospitality

Assuming the 90 days trading horizon Apple Inc is expected to generate 0.74 times more return on investment than RCI Hospitality. However, Apple Inc is 1.34 times less risky than RCI Hospitality. It trades about 0.05 of its potential returns per unit of risk. RCI Hospitality Holdings is currently generating about 0.0 per unit of risk. If you would invest  17,353  in Apple Inc on April 20, 2025 and sell it today you would earn a total of  829.00  from holding Apple Inc or generate 4.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Apple Inc  vs.  RCI Hospitality Holdings

Apple Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Apple is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

RCI Hospitality Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days RCI Hospitality Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, RCI Hospitality is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Apple and RCI Hospitality

The main advantage of trading using opposite Apple and RCI Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.

The idea behind Apple Inc and RCI Hospitality Holdings 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.