Correlation Between Texas Roadhouse and Mitsui OSK
Can any of the company-specific risk be diversified away by investing in both Texas Roadhouse and Mitsui OSK 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 Mitsui OSK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Texas Roadhouse and Mitsui OSK Lines, you can compare the effects of market volatilities on Texas Roadhouse and Mitsui OSK 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 Mitsui OSK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Texas Roadhouse and Mitsui OSK.
Diversification Opportunities for Texas Roadhouse and Mitsui OSK
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Texas and Mitsui is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Texas Roadhouse and Mitsui OSK Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsui OSK Lines 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 Mitsui OSK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsui OSK Lines has no effect on the direction of Texas Roadhouse i.e., Texas Roadhouse and Mitsui OSK go up and down completely randomly.
Pair Corralation between Texas Roadhouse and Mitsui OSK
Assuming the 90 days horizon Texas Roadhouse is expected to generate 0.63 times more return on investment than Mitsui OSK. However, Texas Roadhouse is 1.59 times less risky than Mitsui OSK. It trades about 0.1 of its potential returns per unit of risk. Mitsui OSK Lines is currently generating about 0.04 per unit of risk. If you would invest 8,956 in Texas Roadhouse on September 3, 2024 and sell it today you would earn a total of 10,264 from holding Texas Roadhouse or generate 114.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Texas Roadhouse vs. Mitsui OSK Lines
Performance |
| Timeline |
| Texas Roadhouse |
| Mitsui OSK Lines |
Texas Roadhouse and Mitsui OSK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Texas Roadhouse and Mitsui OSK
The main advantage of trading using opposite Texas Roadhouse and Mitsui OSK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Texas Roadhouse position performs unexpectedly, Mitsui OSK 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 Mitsui OSK will offset losses from the drop in Mitsui OSK's long position.| Texas Roadhouse vs. Virtus Investment Partners | Texas Roadhouse vs. Strategic Investments AS | Texas Roadhouse vs. MAGNUM MINING EXP | Texas Roadhouse vs. GOODYEAR T RUBBER |
| Mitsui OSK vs. NTG Nordic Transport | Mitsui OSK vs. Lion One Metals | Mitsui OSK vs. Texas Roadhouse | Mitsui OSK vs. SERI INDUSTRIAL EO |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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