Correlation Between PKSHA TECHNOLOGY and Texas Roadhouse
Can any of the company-specific risk be diversified away by investing in both PKSHA TECHNOLOGY and Texas Roadhouse 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 PKSHA TECHNOLOGY and Texas Roadhouse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PKSHA TECHNOLOGY INC and Texas Roadhouse, you can compare the effects of market volatilities on PKSHA TECHNOLOGY and Texas Roadhouse 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 PKSHA TECHNOLOGY with a short position of Texas Roadhouse. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKSHA TECHNOLOGY and Texas Roadhouse.
Diversification Opportunities for PKSHA TECHNOLOGY and Texas Roadhouse
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PKSHA and Texas is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and Texas Roadhouse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Texas Roadhouse and PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY INC are associated (or correlated) with Texas Roadhouse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Texas Roadhouse has no effect on the direction of PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and Texas Roadhouse go up and down completely randomly.
Pair Corralation between PKSHA TECHNOLOGY and Texas Roadhouse
Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to generate 2.3 times more return on investment than Texas Roadhouse. However, PKSHA TECHNOLOGY is 2.3 times more volatile than Texas Roadhouse. It trades about 0.06 of its potential returns per unit of risk. Texas Roadhouse is currently generating about 0.1 per unit of risk. If you would invest 1,170 in PKSHA TECHNOLOGY INC on September 12, 2024 and sell it today you would earn a total of 1,490 from holding PKSHA TECHNOLOGY INC or generate 127.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PKSHA TECHNOLOGY INC vs. Texas Roadhouse
Performance |
| Timeline |
| PKSHA TECHNOLOGY INC |
| Texas Roadhouse |
PKSHA TECHNOLOGY and Texas Roadhouse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PKSHA TECHNOLOGY and Texas Roadhouse
The main advantage of trading using opposite PKSHA TECHNOLOGY and Texas Roadhouse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKSHA TECHNOLOGY position performs unexpectedly, Texas Roadhouse 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 Texas Roadhouse will offset losses from the drop in Texas Roadhouse's long position.| PKSHA TECHNOLOGY vs. Nippon Steel | PKSHA TECHNOLOGY vs. KRAKATAU STEEL B | PKSHA TECHNOLOGY vs. RELIANCE STEEL AL | PKSHA TECHNOLOGY vs. COSTCO WHOLESALE CDR |
| Texas Roadhouse vs. Starbucks | Texas Roadhouse vs. Superior Plus Corp | Texas Roadhouse vs. SIVERS SEMICONDUCTORS AB | Texas Roadhouse vs. NorAm Drilling AS |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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