Correlation Between TEXAS ROADHOUSE and Platinum Investment
Can any of the company-specific risk be diversified away by investing in both TEXAS ROADHOUSE and Platinum Investment 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 Platinum Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TEXAS ROADHOUSE and Platinum Investment Management, you can compare the effects of market volatilities on TEXAS ROADHOUSE and Platinum Investment 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 Platinum Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of TEXAS ROADHOUSE and Platinum Investment.
Diversification Opportunities for TEXAS ROADHOUSE and Platinum Investment
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TEXAS and Platinum is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding TEXAS ROADHOUSE and Platinum Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Investment 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 Platinum Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Investment has no effect on the direction of TEXAS ROADHOUSE i.e., TEXAS ROADHOUSE and Platinum Investment go up and down completely randomly.
Pair Corralation between TEXAS ROADHOUSE and Platinum Investment
Assuming the 90 days trading horizon TEXAS ROADHOUSE is expected to generate 0.54 times more return on investment than Platinum Investment. However, TEXAS ROADHOUSE is 1.86 times less risky than Platinum Investment. It trades about 0.1 of its potential returns per unit of risk. Platinum Investment Management is currently generating about -0.01 per unit of risk. If you would invest 8,702 in TEXAS ROADHOUSE on October 13, 2024 and sell it today you would earn a total of 8,813 from holding TEXAS ROADHOUSE or generate 101.28% 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. Platinum Investment Management
Performance |
| Timeline |
| TEXAS ROADHOUSE |
| Platinum Investment |
TEXAS ROADHOUSE and Platinum Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TEXAS ROADHOUSE and Platinum Investment
The main advantage of trading using opposite TEXAS ROADHOUSE and Platinum Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TEXAS ROADHOUSE position performs unexpectedly, Platinum Investment 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 Platinum Investment will offset losses from the drop in Platinum Investment's long position.| TEXAS ROADHOUSE vs. CITIC Telecom International | TEXAS ROADHOUSE vs. Alliance Data Systems | TEXAS ROADHOUSE vs. Iridium Communications | TEXAS ROADHOUSE vs. Cairo Communication SpA |
| Platinum Investment vs. Cairo Communication SpA | Platinum Investment vs. T Mobile | Platinum Investment vs. GEELY AUTOMOBILE | Platinum Investment vs. Yuexiu Transport Infrastructure |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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