Correlation Between PlayAGS and Texas Roadhouse
Can any of the company-specific risk be diversified away by investing in both PlayAGS 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 PlayAGS and Texas Roadhouse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PlayAGS and Texas Roadhouse, you can compare the effects of market volatilities on PlayAGS 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 PlayAGS with a short position of Texas Roadhouse. Check out your portfolio center. Please also check ongoing floating volatility patterns of PlayAGS and Texas Roadhouse.
Diversification Opportunities for PlayAGS and Texas Roadhouse
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PlayAGS and Texas is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding PlayAGS and Texas Roadhouse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Texas Roadhouse and PlayAGS 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 PlayAGS 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 PlayAGS i.e., PlayAGS and Texas Roadhouse go up and down completely randomly.
Pair Corralation between PlayAGS and Texas Roadhouse
Considering the 90-day investment horizon PlayAGS is expected to generate 2.08 times more return on investment than Texas Roadhouse. However, PlayAGS is 2.08 times more volatile than Texas Roadhouse. It trades about 0.07 of its potential returns per unit of risk. Texas Roadhouse is currently generating about 0.11 per unit of risk. If you would invest 517.00 in PlayAGS on August 30, 2024 and sell it today you would earn a total of 645.00 from holding PlayAGS or generate 124.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PlayAGS vs. Texas Roadhouse
Performance |
| Timeline |
| PlayAGS |
| Texas Roadhouse |
PlayAGS and Texas Roadhouse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PlayAGS and Texas Roadhouse
The main advantage of trading using opposite PlayAGS and Texas Roadhouse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PlayAGS 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.| PlayAGS vs. Light Wonder | PlayAGS vs. Everi Holdings | PlayAGS vs. Inspired Entertainment | PlayAGS vs. International Game Technology |
| Texas Roadhouse vs. Brinker International | Texas Roadhouse vs. BJs Restaurants | Texas Roadhouse vs. Papa Johns International | Texas Roadhouse vs. Bloomin Brands |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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