Correlation Between Texas Roadhouse and Kura Sushi
Can any of the company-specific risk be diversified away by investing in both Texas Roadhouse and Kura Sushi 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 Kura Sushi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Texas Roadhouse and Kura Sushi USA, you can compare the effects of market volatilities on Texas Roadhouse and Kura Sushi 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 Kura Sushi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Texas Roadhouse and Kura Sushi.
Diversification Opportunities for Texas Roadhouse and Kura Sushi
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Texas and Kura is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Texas Roadhouse and Kura Sushi USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kura Sushi USA 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 Kura Sushi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kura Sushi USA has no effect on the direction of Texas Roadhouse i.e., Texas Roadhouse and Kura Sushi go up and down completely randomly.
Pair Corralation between Texas Roadhouse and Kura Sushi
Given the investment horizon of 90 days Texas Roadhouse is expected to generate 1.01 times less return on investment than Kura Sushi. But when comparing it to its historical volatility, Texas Roadhouse is 2.58 times less risky than Kura Sushi. It trades about 0.22 of its potential returns per unit of risk. Kura Sushi USA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 9,856 in Kura Sushi USA on August 29, 2024 and sell it today you would earn a total of 682.00 from holding Kura Sushi USA or generate 6.92% 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. Kura Sushi USA
Performance |
| Timeline |
| Texas Roadhouse |
| Kura Sushi USA |
Texas Roadhouse and Kura Sushi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Texas Roadhouse and Kura Sushi
The main advantage of trading using opposite Texas Roadhouse and Kura Sushi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Texas Roadhouse position performs unexpectedly, Kura Sushi 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 Kura Sushi will offset losses from the drop in Kura Sushi's long position.| Texas Roadhouse vs. Brinker International | Texas Roadhouse vs. BJs Restaurants | Texas Roadhouse vs. Papa Johns International | Texas Roadhouse vs. Bloomin Brands |
| Kura Sushi vs. Brinker International | Kura Sushi vs. Dennys Corp | Kura Sushi vs. Bloomin Brands | Kura Sushi vs. Jack In The |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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