Correlation Between Texas Roadhouse and Performance Food
Can any of the company-specific risk be diversified away by investing in both Texas Roadhouse and Performance Food 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 Performance Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Texas Roadhouse and Performance Food Group, you can compare the effects of market volatilities on Texas Roadhouse and Performance Food 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 Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Texas Roadhouse and Performance Food.
Diversification Opportunities for Texas Roadhouse and Performance Food
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Texas and Performance is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Texas Roadhouse and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food 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 Performance Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Food has no effect on the direction of Texas Roadhouse i.e., Texas Roadhouse and Performance Food go up and down completely randomly.
Pair Corralation between Texas Roadhouse and Performance Food
Assuming the 90 days horizon Texas Roadhouse is expected to generate 1.25 times less return on investment than Performance Food. In addition to that, Texas Roadhouse is 1.97 times more volatile than Performance Food Group. It trades about 0.08 of its total potential returns per unit of risk. Performance Food Group is currently generating about 0.19 per unit of volatility. If you would invest 8,150 in Performance Food Group on October 20, 2024 and sell it today you would earn a total of 250.00 from holding Performance Food Group or generate 3.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Texas Roadhouse vs. Performance Food Group
Performance |
| Timeline |
| Texas Roadhouse |
| Performance Food |
Texas Roadhouse and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Texas Roadhouse and Performance Food
The main advantage of trading using opposite Texas Roadhouse and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Texas Roadhouse position performs unexpectedly, Performance Food 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 Performance Food will offset losses from the drop in Performance Food's long position.| Texas Roadhouse vs. MCEWEN MINING INC | Texas Roadhouse vs. Calibre Mining Corp | Texas Roadhouse vs. Yuexiu Transport Infrastructure | Texas Roadhouse vs. Zijin Mining Group |
| Performance Food vs. Easy Software AG | Performance Food vs. Liberty Broadband | Performance Food vs. GOLD ROAD RES | Performance Food vs. Texas Roadhouse |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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