Correlation Between DAX Index and Texas Roadhouse
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By analyzing existing cross correlation between DAX Index and Texas Roadhouse, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Texas Roadhouse. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Texas Roadhouse.
Diversification Opportunities for DAX Index and Texas Roadhouse
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DAX and Texas is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Texas Roadhouse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Texas Roadhouse and DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and Texas Roadhouse go up and down completely randomly.
Pair Corralation between DAX Index and Texas Roadhouse
Assuming the 90 days trading horizon DAX Index is expected to generate 3.06 times less return on investment than Texas Roadhouse. But when comparing it to its historical volatility, DAX Index is 2.2 times less risky than Texas Roadhouse. It trades about 0.14 of its potential returns per unit of risk. Texas Roadhouse is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 17,665 in Texas Roadhouse on September 1, 2024 and sell it today you would earn a total of 1,570 from holding Texas Roadhouse or generate 8.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Texas Roadhouse
Performance |
| Timeline |
DAX Index and Texas Roadhouse Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Texas Roadhouse
Pair trading matchups for Texas Roadhouse
Pair Trading with DAX Index and Texas Roadhouse
The main advantage of trading using opposite DAX Index and Texas Roadhouse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.| DAX Index vs. BE Semiconductor Industries | DAX Index vs. REGAL ASIAN INVESTMENTS | DAX Index vs. SEI INVESTMENTS | DAX Index vs. National Beverage Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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