Correlation Between RCI Hospitality and UniCredit SpA

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

Diversification Opportunities for RCI Hospitality and UniCredit SpA

0.06

Correlation Coefficient

RCI Hospitality  UniCredit SpA

Significant diversification

The 3 months correlation between RCI and UniCredit is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and UniCredit SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UniCredit SpA 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 UniCredit SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UniCredit SpA has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and UniCredit SpA go up and down completely randomly.

Pair Corralation between RCI Hospitality and UniCredit SpA

Assuming the 90 days trading horizon RCI Hospitality is expected to generate 29.44 times less return on investment than UniCredit SpA. In addition to that, RCI Hospitality is 1.3 times more volatile than UniCredit SpA. It trades about 0.0 of its total potential returns per unit of risk. UniCredit SpA is currently generating about 0.16 per unit of volatility. If you would invest  4,860  in UniCredit SpA on April 20, 2025 and sell it today you would earn a total of  925.00  from holding UniCredit SpA or generate 19.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

RCI Hospitality Holdings  vs.  UniCredit SpA

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.

UniCredit SpA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UniCredit SpA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, UniCredit SpA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RCI Hospitality and UniCredit SpA

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

The idea behind RCI Hospitality Holdings and UniCredit SpA 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.