Correlation Between RCI Hospitality and AFFLUENT MEDICAL

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

Diversification Opportunities for RCI Hospitality and AFFLUENT MEDICAL

0.24

Correlation Coefficient

RCI Hospitality  AFFLUENT MEDICAL

Modest diversification

The 3 months correlation between RCI and AFFLUENT is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and AFFLUENT MEDICAL SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFFLUENT MEDICAL SAS 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 AFFLUENT MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFFLUENT MEDICAL SAS has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and AFFLUENT MEDICAL go up and down completely randomly.

Pair Corralation between RCI Hospitality and AFFLUENT MEDICAL

Assuming the 90 days trading horizon RCI Hospitality Holdings is expected to generate 0.93 times more return on investment than AFFLUENT MEDICAL. However, RCI Hospitality Holdings is 1.07 times less risky than AFFLUENT MEDICAL. It trades about 0.0 of its potential returns per unit of risk. AFFLUENT MEDICAL SAS is currently generating about -0.04 per unit of risk. If you would invest  3,240  in RCI Hospitality Holdings on April 20, 2025 and sell it today you would lose (34.00) from holding RCI Hospitality Holdings or give up 1.05% of portfolio value over 90 days.

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

RCI Hospitality Holdings  vs.  AFFLUENT MEDICAL SAS

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.

AFFLUENT MEDICAL SAS

Risk-Adjusted Performance

Very Weak

Over the last 90 days AFFLUENT MEDICAL SAS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with RCI Hospitality and AFFLUENT MEDICAL

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

The idea behind RCI Hospitality Holdings and AFFLUENT MEDICAL SAS 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.