Correlation Between TEXAS ROADHOUSE and Natural Health
Can any of the company-specific risk be diversified away by investing in both TEXAS ROADHOUSE and Natural Health 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 Natural Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TEXAS ROADHOUSE and Natural Health Trends, you can compare the effects of market volatilities on TEXAS ROADHOUSE and Natural Health 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 Natural Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of TEXAS ROADHOUSE and Natural Health.
Diversification Opportunities for TEXAS ROADHOUSE and Natural Health
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TEXAS and Natural is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding TEXAS ROADHOUSE and Natural Health Trends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Health Trends 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 Natural Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Health Trends has no effect on the direction of TEXAS ROADHOUSE i.e., TEXAS ROADHOUSE and Natural Health go up and down completely randomly.
Pair Corralation between TEXAS ROADHOUSE and Natural Health
Assuming the 90 days trading horizon TEXAS ROADHOUSE is expected to generate 0.8 times more return on investment than Natural Health. However, TEXAS ROADHOUSE is 1.26 times less risky than Natural Health. It trades about 0.12 of its potential returns per unit of risk. Natural Health Trends is currently generating about 0.01 per unit of risk. If you would invest 13,491 in TEXAS ROADHOUSE on September 1, 2024 and sell it today you would earn a total of 5,714 from holding TEXAS ROADHOUSE or generate 42.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TEXAS ROADHOUSE vs. Natural Health Trends
Performance |
| Timeline |
| TEXAS ROADHOUSE |
| Natural Health Trends |
TEXAS ROADHOUSE and Natural Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TEXAS ROADHOUSE and Natural Health
The main advantage of trading using opposite TEXAS ROADHOUSE and Natural Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TEXAS ROADHOUSE position performs unexpectedly, Natural Health 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 Natural Health will offset losses from the drop in Natural Health's long position.| TEXAS ROADHOUSE vs. SIVERS SEMICONDUCTORS AB | TEXAS ROADHOUSE vs. Darden Restaurants | TEXAS ROADHOUSE vs. Reliance Steel Aluminum | TEXAS ROADHOUSE vs. Q2M Managementberatung AG |
| Natural Health vs. Apple Inc | Natural Health vs. Apple Inc | Natural Health vs. Apple Inc | Natural Health vs. Apple Inc |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |