Correlation Between RCI Hospitality and NATIONAL HEALTHCARE

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

Diversification Opportunities for RCI Hospitality and NATIONAL HEALTHCARE

-0.36

Correlation Coefficient

RCI Hospitality  NATIONAL HEALTHCARE

Very good diversification

The 3 months correlation between RCI and NATIONAL is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and NATIONAL HEALTHCARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NATIONAL HEALTHCARE 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 NATIONAL HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NATIONAL HEALTHCARE has no effect on the direction of RCI Hospitality i.e., RCI Hospitality and NATIONAL HEALTHCARE go up and down completely randomly.

Pair Corralation between RCI Hospitality and NATIONAL HEALTHCARE

Assuming the 90 days trading horizon RCI Hospitality Holdings is expected to under-perform the NATIONAL HEALTHCARE. In addition to that, RCI Hospitality is 1.38 times more volatile than NATIONAL HEALTHCARE. It trades about -0.01 of its total potential returns per unit of risk. NATIONAL HEALTHCARE is currently generating about 0.08 per unit of volatility. If you would invest  8,252  in NATIONAL HEALTHCARE on April 25, 2025 and sell it today you would earn a total of  548.00  from holding NATIONAL HEALTHCARE or generate 6.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	92.06%
Values	Daily Returns

RCI Hospitality Holdings  vs.  NATIONAL HEALTHCARE

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 current stock price uproar, may contribute to short-horizon losses for the private investors.

NATIONAL HEALTHCARE

Risk-Adjusted Performance

Modest

Over the last 90 days NATIONAL HEALTHCARE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather fragile basic indicators, NATIONAL HEALTHCARE may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with RCI Hospitality and NATIONAL HEALTHCARE

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

The idea behind RCI Hospitality Holdings and NATIONAL HEALTHCARE 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.