Correlation Between Texas Roadhouse and US FOODS
Can any of the company-specific risk be diversified away by investing in both Texas Roadhouse and US FOODS 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 US FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Texas Roadhouse and US FOODS HOLDING, you can compare the effects of market volatilities on Texas Roadhouse and US FOODS 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 US FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Texas Roadhouse and US FOODS.
Diversification Opportunities for Texas Roadhouse and US FOODS
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Texas and UFH is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Texas Roadhouse and US FOODS HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US FOODS HOLDING 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 US FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US FOODS HOLDING has no effect on the direction of Texas Roadhouse i.e., Texas Roadhouse and US FOODS go up and down completely randomly.
Pair Corralation between Texas Roadhouse and US FOODS
Assuming the 90 days horizon Texas Roadhouse is expected to under-perform the US FOODS. In addition to that, Texas Roadhouse is 1.52 times more volatile than US FOODS HOLDING. It trades about -0.01 of its total potential returns per unit of risk. US FOODS HOLDING is currently generating about 0.12 per unit of volatility. If you would invest 6,500 in US FOODS HOLDING on October 24, 2024 and sell it today you would earn a total of 150.00 from holding US FOODS HOLDING or generate 2.31% 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. US FOODS HOLDING
Performance |
| Timeline |
| Texas Roadhouse |
| US FOODS HOLDING |
Texas Roadhouse and US FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Texas Roadhouse and US FOODS
The main advantage of trading using opposite Texas Roadhouse and US FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Texas Roadhouse position performs unexpectedly, US FOODS 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 US FOODS will offset losses from the drop in US FOODS's long position.| Texas Roadhouse vs. Zijin Mining Group | Texas Roadhouse vs. Perseus Mining Limited | Texas Roadhouse vs. Sekisui Chemical Co | Texas Roadhouse vs. X FAB Silicon Foundries |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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