Correlation Between Texas Roadhouse and U Power
Can any of the company-specific risk be diversified away by investing in both Texas Roadhouse and U Power 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 U Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Texas Roadhouse and U Power Limited, you can compare the effects of market volatilities on Texas Roadhouse and U Power 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 U Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Texas Roadhouse and U Power.
Diversification Opportunities for Texas Roadhouse and U Power
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Texas and UCAR is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Texas Roadhouse and U Power Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Power Limited 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 U Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Power Limited has no effect on the direction of Texas Roadhouse i.e., Texas Roadhouse and U Power go up and down completely randomly.
Pair Corralation between Texas Roadhouse and U Power
Given the investment horizon of 90 days Texas Roadhouse is expected to generate 0.4 times more return on investment than U Power. However, Texas Roadhouse is 2.51 times less risky than U Power. It trades about 0.15 of its potential returns per unit of risk. U Power Limited is currently generating about -0.21 per unit of risk. If you would invest 18,541 in Texas Roadhouse on September 4, 2024 and sell it today you would earn a total of 1,069 from holding Texas Roadhouse or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Texas Roadhouse vs. U Power Limited
Performance |
| Timeline |
| Texas Roadhouse |
| U Power Limited |
Texas Roadhouse and U Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Texas Roadhouse and U Power
The main advantage of trading using opposite Texas Roadhouse and U Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Texas Roadhouse position performs unexpectedly, U Power 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 U Power will offset losses from the drop in U Power's long position.| Texas Roadhouse vs. Brinker International | Texas Roadhouse vs. BJs Restaurants | Texas Roadhouse vs. Papa Johns International | Texas Roadhouse vs. Bloomin Brands |
| U Power vs. Sonic Automotive | U Power vs. Lithia Motors | U Power vs. AutoNation | U Power vs. Penske Automotive Group |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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