Correlation Between Texas Roadhouse and PlayAGS
Can any of the company-specific risk be diversified away by investing in both Texas Roadhouse and PlayAGS 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 PlayAGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Texas Roadhouse and PlayAGS, you can compare the effects of market volatilities on Texas Roadhouse and PlayAGS 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 PlayAGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Texas Roadhouse and PlayAGS.
Diversification Opportunities for Texas Roadhouse and PlayAGS
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Texas and PlayAGS is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Texas Roadhouse and PlayAGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PlayAGS 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 PlayAGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PlayAGS has no effect on the direction of Texas Roadhouse i.e., Texas Roadhouse and PlayAGS go up and down completely randomly.
Pair Corralation between Texas Roadhouse and PlayAGS
Given the investment horizon of 90 days Texas Roadhouse is expected to generate 7.48 times more return on investment than PlayAGS. However, Texas Roadhouse is 7.48 times more volatile than PlayAGS. It trades about 0.2 of its potential returns per unit of risk. PlayAGS is currently generating about 0.19 per unit of risk. If you would invest 16,608 in Texas Roadhouse on August 31, 2024 and sell it today you would earn a total of 3,728 from holding Texas Roadhouse or generate 22.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Texas Roadhouse vs. PlayAGS
Performance |
| Timeline |
| Texas Roadhouse |
| PlayAGS |
Texas Roadhouse and PlayAGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Texas Roadhouse and PlayAGS
The main advantage of trading using opposite Texas Roadhouse and PlayAGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Texas Roadhouse position performs unexpectedly, PlayAGS 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 PlayAGS will offset losses from the drop in PlayAGS's long position.| Texas Roadhouse vs. Brinker International | Texas Roadhouse vs. BJs Restaurants | Texas Roadhouse vs. Papa Johns International | Texas Roadhouse vs. Bloomin Brands |
| PlayAGS vs. Light Wonder | PlayAGS vs. Everi Holdings | PlayAGS vs. Inspired Entertainment | PlayAGS vs. International Game Technology |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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