Correlation Between Texas Roadhouse and GungHo Online
Can any of the company-specific risk be diversified away by investing in both Texas Roadhouse and GungHo Online 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 GungHo Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Texas Roadhouse and GungHo Online Entertainment, you can compare the effects of market volatilities on Texas Roadhouse and GungHo Online 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 GungHo Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Texas Roadhouse and GungHo Online.
Diversification Opportunities for Texas Roadhouse and GungHo Online
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Texas and GungHo is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Texas Roadhouse and GungHo Online Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GungHo Online Entert 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 GungHo Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GungHo Online Entert has no effect on the direction of Texas Roadhouse i.e., Texas Roadhouse and GungHo Online go up and down completely randomly.
Pair Corralation between Texas Roadhouse and GungHo Online
Assuming the 90 days horizon Texas Roadhouse is expected to generate 0.89 times more return on investment than GungHo Online. However, Texas Roadhouse is 1.13 times less risky than GungHo Online. It trades about 0.24 of its potential returns per unit of risk. GungHo Online Entertainment is currently generating about -0.13 per unit of risk. If you would invest 17,365 in Texas Roadhouse on September 2, 2024 and sell it today you would earn a total of 1,855 from holding Texas Roadhouse or generate 10.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Texas Roadhouse vs. GungHo Online Entertainment
Performance |
| Timeline |
| Texas Roadhouse |
| GungHo Online Entert |
Texas Roadhouse and GungHo Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Texas Roadhouse and GungHo Online
The main advantage of trading using opposite Texas Roadhouse and GungHo Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Texas Roadhouse position performs unexpectedly, GungHo Online 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 GungHo Online will offset losses from the drop in GungHo Online's long position.| Texas Roadhouse vs. Datang International Power | Texas Roadhouse vs. Take Two Interactive Software | Texas Roadhouse vs. Fidelity National Information | Texas Roadhouse vs. Pure Storage |
| GungHo Online vs. Nintendo Co | GungHo Online vs. Sea Limited | GungHo Online vs. Superior Plus Corp | GungHo Online vs. NMI Holdings |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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