Correlation Between International Game and Texas Roadhouse
Can any of the company-specific risk be diversified away by investing in both International Game 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 International Game and Texas Roadhouse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Game Technology and Texas Roadhouse, you can compare the effects of market volatilities on International Game 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 International Game with a short position of Texas Roadhouse. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and Texas Roadhouse.
Diversification Opportunities for International Game and Texas Roadhouse
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between International and Texas is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and Texas Roadhouse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Texas Roadhouse and International Game 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 International Game Technology 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 International Game i.e., International Game and Texas Roadhouse go up and down completely randomly.
Pair Corralation between International Game and Texas Roadhouse
Considering the 90-day investment horizon International Game Technology is expected to under-perform the Texas Roadhouse. In addition to that, International Game is 1.02 times more volatile than Texas Roadhouse. It trades about -0.19 of its total potential returns per unit of risk. Texas Roadhouse is currently generating about 0.14 per unit of volatility. If you would invest 19,318 in Texas Roadhouse on August 30, 2024 and sell it today you would earn a total of 1,018 from holding Texas Roadhouse or generate 5.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Game Technology vs. Texas Roadhouse
Performance |
| Timeline |
| International Game |
| Texas Roadhouse |
International Game and Texas Roadhouse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Game and Texas Roadhouse
The main advantage of trading using opposite International Game and Texas Roadhouse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game 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.| International Game vs. Accel Entertainment | International Game vs. PlayAGS | International Game vs. Everi Holdings | International Game vs. Light Wonder |
| 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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