Correlation Between Safety Insurance and Texas Roadhouse
Can any of the company-specific risk be diversified away by investing in both Safety Insurance and Texas Roadhouse 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 Safety Insurance and Texas Roadhouse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safety Insurance Group and Texas Roadhouse, you can compare the effects of market volatilities on Safety Insurance and Texas Roadhouse 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 Safety Insurance with a short position of Texas Roadhouse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safety Insurance and Texas Roadhouse.
Diversification Opportunities for Safety Insurance and Texas Roadhouse
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Safety and Texas is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Safety Insurance Group and Texas Roadhouse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Texas Roadhouse and Safety Insurance 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 Safety Insurance Group are associated (or correlated) with Texas Roadhouse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Texas Roadhouse has no effect on the direction of Safety Insurance i.e., Safety Insurance and Texas Roadhouse go up and down completely randomly.
Pair Corralation between Safety Insurance and Texas Roadhouse
Assuming the 90 days horizon Safety Insurance Group is expected to generate 0.87 times more return on investment than Texas Roadhouse. However, Safety Insurance Group is 1.15 times less risky than Texas Roadhouse. It trades about 0.27 of its potential returns per unit of risk. Texas Roadhouse is currently generating about 0.21 per unit of risk. If you would invest 7,250 in Safety Insurance Group on August 29, 2024 and sell it today you would earn a total of 800.00 from holding Safety Insurance Group or generate 11.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safety Insurance Group vs. Texas Roadhouse
Performance |
| Timeline |
| Safety Insurance |
| Texas Roadhouse |
Safety Insurance and Texas Roadhouse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safety Insurance and Texas Roadhouse
The main advantage of trading using opposite Safety Insurance and Texas Roadhouse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safety Insurance position performs unexpectedly, Texas Roadhouse 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 Texas Roadhouse will offset losses from the drop in Texas Roadhouse's long position.| Safety Insurance vs. PICC Property and | Safety Insurance vs. QBE Insurance Group | Safety Insurance vs. Superior Plus Corp | Safety Insurance vs. SIVERS SEMICONDUCTORS AB |
| Texas Roadhouse vs. Austevoll Seafood ASA | Texas Roadhouse vs. American Eagle Outfitters | Texas Roadhouse vs. Marie Brizard Wine | Texas Roadhouse vs. Astral Foods Limited |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |