Correlation Between TEXAS ROADHOUSE and Nokia
Can any of the company-specific risk be diversified away by investing in both TEXAS ROADHOUSE and Nokia 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 Nokia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TEXAS ROADHOUSE and Nokia, you can compare the effects of market volatilities on TEXAS ROADHOUSE and Nokia 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 Nokia. Check out your portfolio center. Please also check ongoing floating volatility patterns of TEXAS ROADHOUSE and Nokia.
Diversification Opportunities for TEXAS ROADHOUSE and Nokia
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TEXAS and Nokia is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding TEXAS ROADHOUSE and Nokia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nokia 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 Nokia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nokia has no effect on the direction of TEXAS ROADHOUSE i.e., TEXAS ROADHOUSE and Nokia go up and down completely randomly.
Pair Corralation between TEXAS ROADHOUSE and Nokia
Assuming the 90 days trading horizon TEXAS ROADHOUSE is expected to under-perform the Nokia. In addition to that, TEXAS ROADHOUSE is 1.08 times more volatile than Nokia. It trades about -0.25 of its total potential returns per unit of risk. Nokia is currently generating about 0.05 per unit of volatility. If you would invest 487.00 in Nokia on December 31, 2024 and sell it today you would earn a total of 6.00 from holding Nokia or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TEXAS ROADHOUSE vs. Nokia
Performance |
| Timeline |
| TEXAS ROADHOUSE |
| Nokia |
TEXAS ROADHOUSE and Nokia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TEXAS ROADHOUSE and Nokia
The main advantage of trading using opposite TEXAS ROADHOUSE and Nokia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TEXAS ROADHOUSE position performs unexpectedly, Nokia 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 Nokia will offset losses from the drop in Nokia's long position.| TEXAS ROADHOUSE vs. Apple Inc | TEXAS ROADHOUSE vs. Apple Inc | TEXAS ROADHOUSE vs. Apple Inc | TEXAS ROADHOUSE vs. Apple Inc |
| Nokia vs. Iridium Communications | Nokia vs. Entravision Communications | Nokia vs. MINCO SILVER | Nokia vs. Globex Mining Enterprises |
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.
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