Correlation Between Texas Roadhouse and Senmiao Technology
Can any of the company-specific risk be diversified away by investing in both Texas Roadhouse and Senmiao Technology 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 Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Texas Roadhouse and Senmiao Technology, you can compare the effects of market volatilities on Texas Roadhouse and Senmiao Technology 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 Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Texas Roadhouse and Senmiao Technology.
Diversification Opportunities for Texas Roadhouse and Senmiao Technology
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Texas and Senmiao is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Texas Roadhouse and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology 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 Senmiao Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senmiao Technology has no effect on the direction of Texas Roadhouse i.e., Texas Roadhouse and Senmiao Technology go up and down completely randomly.
Pair Corralation between Texas Roadhouse and Senmiao Technology
Given the investment horizon of 90 days Texas Roadhouse is expected to generate 0.41 times more return on investment than Senmiao Technology. However, Texas Roadhouse is 2.44 times less risky than Senmiao Technology. It trades about 0.22 of its potential returns per unit of risk. Senmiao Technology is currently generating about 0.03 per unit of risk. If you would invest 18,811 in Texas Roadhouse on August 29, 2024 and sell it today you would earn a total of 1,660 from holding Texas Roadhouse or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Texas Roadhouse vs. Senmiao Technology
Performance |
| Timeline |
| Texas Roadhouse |
| Senmiao Technology |
Texas Roadhouse and Senmiao Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Texas Roadhouse and Senmiao Technology
The main advantage of trading using opposite Texas Roadhouse and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Texas Roadhouse position performs unexpectedly, Senmiao Technology 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 Senmiao Technology will offset losses from the drop in Senmiao Technology's long position.| Texas Roadhouse vs. Brinker International | Texas Roadhouse vs. BJs Restaurants | Texas Roadhouse vs. Papa Johns International | Texas Roadhouse vs. Bloomin Brands |
| Senmiao Technology vs. X Financial Class | Senmiao Technology vs. Yirendai | Senmiao Technology vs. Pintec Technology Holdings | Senmiao Technology vs. Qudian 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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