Correlation Between Texas Roadhouse and Rivian Automotive
Can any of the company-specific risk be diversified away by investing in both Texas Roadhouse and Rivian Automotive 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 Rivian Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Texas Roadhouse and Rivian Automotive, you can compare the effects of market volatilities on Texas Roadhouse and Rivian Automotive 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 Rivian Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Texas Roadhouse and Rivian Automotive.
Diversification Opportunities for Texas Roadhouse and Rivian Automotive
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Texas and Rivian is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Texas Roadhouse and Rivian Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rivian Automotive 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 Rivian Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rivian Automotive has no effect on the direction of Texas Roadhouse i.e., Texas Roadhouse and Rivian Automotive go up and down completely randomly.
Pair Corralation between Texas Roadhouse and Rivian Automotive
Given the investment horizon of 90 days Texas Roadhouse is expected to under-perform the Rivian Automotive. But the stock apears to be less risky and, when comparing its historical volatility, Texas Roadhouse is 3.96 times less risky than Rivian Automotive. The stock trades about -0.01 of its potential returns per unit of risk. The Rivian Automotive is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,104 in Rivian Automotive on September 12, 2024 and sell it today you would earn a total of 302.00 from holding Rivian Automotive or generate 27.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Texas Roadhouse vs. Rivian Automotive
Performance |
| Timeline |
| Texas Roadhouse |
| Rivian Automotive |
Texas Roadhouse and Rivian Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Texas Roadhouse and Rivian Automotive
The main advantage of trading using opposite Texas Roadhouse and Rivian Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Texas Roadhouse position performs unexpectedly, Rivian Automotive 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 Rivian Automotive will offset losses from the drop in Rivian Automotive's long position.| Texas Roadhouse vs. Noble Romans | Texas Roadhouse vs. Good Times Restaurants | Texas Roadhouse vs. Flanigans Enterprises | Texas Roadhouse vs. FAT Brands |
| Rivian Automotive vs. Nio Class A | Rivian Automotive vs. Xpeng Inc | Rivian Automotive vs. Tesla Inc | Rivian Automotive vs. Li Auto |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |