Correlation Between U Power and Texas Roadhouse
Can any of the company-specific risk be diversified away by investing in both U Power and Texas Roadhouse 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 U Power and Texas Roadhouse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between U Power Limited and Texas Roadhouse, you can compare the effects of market volatilities on U Power and Texas Roadhouse 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 U Power with a short position of Texas Roadhouse. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Power and Texas Roadhouse.
Diversification Opportunities for U Power and Texas Roadhouse
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between UCAR and Texas is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and Texas Roadhouse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Texas Roadhouse and U Power 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 U Power Limited are associated (or correlated) with Texas Roadhouse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Texas Roadhouse has no effect on the direction of U Power i.e., U Power and Texas Roadhouse go up and down completely randomly.
Pair Corralation between U Power and Texas Roadhouse
Given the investment horizon of 90 days U Power Limited is expected to generate 2.65 times more return on investment than Texas Roadhouse. However, U Power is 2.65 times more volatile than Texas Roadhouse. It trades about 0.03 of its potential returns per unit of risk. Texas Roadhouse is currently generating about -0.01 per unit of risk. If you would invest 716.00 in U Power Limited on September 12, 2024 and sell it today you would earn a total of 4.00 from holding U Power Limited or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
U Power Limited vs. Texas Roadhouse
Performance |
| Timeline |
| U Power Limited |
| Texas Roadhouse |
U Power and Texas Roadhouse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Power and Texas Roadhouse
The main advantage of trading using opposite U Power and Texas Roadhouse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Power position performs unexpectedly, Texas Roadhouse 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 Texas Roadhouse will offset losses from the drop in Texas Roadhouse's long position.| U Power vs. Kaixin Auto Holdings | U Power vs. Uxin | U Power vs. SunCar Technology Group | U Power vs. Carvana Co |
| Texas Roadhouse vs. Noble Romans | Texas Roadhouse vs. Good Times Restaurants | Texas Roadhouse vs. Flanigans Enterprises | Texas Roadhouse vs. FAT Brands |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |