Correlation Between Texas Roadhouse and Singapore Reinsurance
Can any of the company-specific risk be diversified away by investing in both Texas Roadhouse and Singapore Reinsurance 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 Singapore Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Texas Roadhouse and Singapore Reinsurance, you can compare the effects of market volatilities on Texas Roadhouse and Singapore Reinsurance 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 Singapore Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Texas Roadhouse and Singapore Reinsurance.
Diversification Opportunities for Texas Roadhouse and Singapore Reinsurance
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Texas and Singapore is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Texas Roadhouse and Singapore Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Reinsurance 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 Singapore Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Reinsurance has no effect on the direction of Texas Roadhouse i.e., Texas Roadhouse and Singapore Reinsurance go up and down completely randomly.
Pair Corralation between Texas Roadhouse and Singapore Reinsurance
Assuming the 90 days horizon Texas Roadhouse is expected to generate 0.72 times more return on investment than Singapore Reinsurance. However, Texas Roadhouse is 1.39 times less risky than Singapore Reinsurance. It trades about 0.22 of its potential returns per unit of risk. Singapore Reinsurance is currently generating about 0.15 per unit of risk. If you would invest 16,550 in Texas Roadhouse on August 26, 2024 and sell it today you would earn a total of 1,840 from holding Texas Roadhouse or generate 11.12% 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. Singapore Reinsurance
Performance |
| Timeline |
| Texas Roadhouse |
| Singapore Reinsurance |
Texas Roadhouse and Singapore Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Texas Roadhouse and Singapore Reinsurance
The main advantage of trading using opposite Texas Roadhouse and Singapore Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Texas Roadhouse position performs unexpectedly, Singapore Reinsurance 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 Singapore Reinsurance will offset losses from the drop in Singapore Reinsurance's long position.| Texas Roadhouse vs. Hanison Construction Holdings | Texas Roadhouse vs. Citic Telecom International | Texas Roadhouse vs. North American Construction | Texas Roadhouse vs. TITAN MACHINERY |
| Singapore Reinsurance vs. COPLAND ROAD CAPITAL | Singapore Reinsurance vs. SOFTBANK P ADR | Singapore Reinsurance vs. PT Bank Maybank | Singapore Reinsurance 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 CEOs Directory module to screen CEOs from public companies around the world.
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