Correlation Between TEXAS ROADHOUSE and Bank of New York Mellon
Can any of the company-specific risk be diversified away by investing in both TEXAS ROADHOUSE and Bank of New York Mellon 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 TEXAS ROADHOUSE and Bank of New York Mellon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TEXAS ROADHOUSE and The Bank of, you can compare the effects of market volatilities on TEXAS ROADHOUSE and Bank of New York Mellon 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 TEXAS ROADHOUSE with a short position of Bank of New York Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of TEXAS ROADHOUSE and Bank of New York Mellon.
Diversification Opportunities for TEXAS ROADHOUSE and Bank of New York Mellon
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TEXAS and Bank is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding TEXAS ROADHOUSE and The Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of New York Mellon and TEXAS ROADHOUSE 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 TEXAS ROADHOUSE are associated (or correlated) with Bank of New York Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of New York Mellon has no effect on the direction of TEXAS ROADHOUSE i.e., TEXAS ROADHOUSE and Bank of New York Mellon go up and down completely randomly.
Pair Corralation between TEXAS ROADHOUSE and Bank of New York Mellon
Assuming the 90 days trading horizon TEXAS ROADHOUSE is expected to generate 1.84 times more return on investment than Bank of New York Mellon. However, TEXAS ROADHOUSE is 1.84 times more volatile than The Bank of. It trades about 0.07 of its potential returns per unit of risk. The Bank of is currently generating about 0.05 per unit of risk. If you would invest 17,195 in TEXAS ROADHOUSE on December 4, 2024 and sell it today you would earn a total of 460.00 from holding TEXAS ROADHOUSE or generate 2.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
TEXAS ROADHOUSE vs. The Bank of
Performance |
| Timeline |
| TEXAS ROADHOUSE |
| Bank of New York Mellon |
TEXAS ROADHOUSE and Bank of New York Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TEXAS ROADHOUSE and Bank of New York Mellon
The main advantage of trading using opposite TEXAS ROADHOUSE and Bank of New York Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TEXAS ROADHOUSE position performs unexpectedly, Bank of New York Mellon 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 Bank of New York Mellon will offset losses from the drop in Bank of New York Mellon's long position.| TEXAS ROADHOUSE vs. Dalata Hotel Group | TEXAS ROADHOUSE vs. Meli Hotels International | TEXAS ROADHOUSE vs. Choice Hotels International | TEXAS ROADHOUSE vs. MTI INVESTMENT SE |
| Bank of New York Mellon vs. Universal Display | Bank of New York Mellon vs. American Eagle Outfitters | Bank of New York Mellon vs. WT OFFSHORE | Bank of New York Mellon vs. ANTA Sports Products |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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