Correlation Between Texas Roadhouse and Uber Technologies
Can any of the company-specific risk be diversified away by investing in both Texas Roadhouse and Uber Technologies 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 Uber Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Texas Roadhouse and Uber Technologies, you can compare the effects of market volatilities on Texas Roadhouse and Uber Technologies 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 Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Texas Roadhouse and Uber Technologies.
Diversification Opportunities for Texas Roadhouse and Uber Technologies
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Texas and Uber is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Texas Roadhouse and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies 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 Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of Texas Roadhouse i.e., Texas Roadhouse and Uber Technologies go up and down completely randomly.
Pair Corralation between Texas Roadhouse and Uber Technologies
Assuming the 90 days horizon Texas Roadhouse is expected to generate 1.36 times less return on investment than Uber Technologies. But when comparing it to its historical volatility, Texas Roadhouse is 1.52 times less risky than Uber Technologies. It trades about 0.1 of its potential returns per unit of risk. Uber Technologies is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,300 in Uber Technologies on September 12, 2024 and sell it today you would earn a total of 3,899 from holding Uber Technologies or generate 169.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Texas Roadhouse vs. Uber Technologies
Performance |
| Timeline |
| Texas Roadhouse |
| Uber Technologies |
Texas Roadhouse and Uber Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Texas Roadhouse and Uber Technologies
The main advantage of trading using opposite Texas Roadhouse and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Texas Roadhouse position performs unexpectedly, Uber Technologies 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 Uber Technologies will offset losses from the drop in Uber Technologies' long position.| Texas Roadhouse vs. Starbucks | Texas Roadhouse vs. Superior Plus Corp | Texas Roadhouse vs. SIVERS SEMICONDUCTORS AB | Texas Roadhouse vs. NorAm Drilling AS |
| Uber Technologies vs. Apple Inc | Uber Technologies vs. Apple Inc | Uber Technologies vs. Apple Inc | Uber Technologies vs. Apple Inc |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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