Correlation Between Brinker International and TOREX SEMICONDUCTOR

Can any of the company-specific risk be diversified away by investing in both Brinker International and TOREX SEMICONDUCTOR 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 Brinker International and TOREX SEMICONDUCTOR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Brinker International and TOREX SEMICONDUCTOR LTD, you can compare the effects of market volatilities on Brinker International and TOREX SEMICONDUCTOR 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 Brinker International with a short position of TOREX SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker International and TOREX SEMICONDUCTOR.

Diversification Opportunities for Brinker International and TOREX SEMICONDUCTOR

-0.91

Correlation Coefficient

Brinker International  TOREX SEMICONDUCTOR

Pay attention - limited upside

The 3 months correlation between Brinker and TOREX is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Brinker International and TOREX SEMICONDUCTOR LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOREX SEMICONDUCTOR LTD and Brinker International 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 Brinker International are associated (or correlated) with TOREX SEMICONDUCTOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOREX SEMICONDUCTOR LTD has no effect on the direction of Brinker International i.e., Brinker International and TOREX SEMICONDUCTOR go up and down completely randomly.

Pair Corralation between Brinker International and TOREX SEMICONDUCTOR

Assuming the 90 days horizon Brinker International is expected to generate 0.97 times more return on investment than TOREX SEMICONDUCTOR. However, Brinker International is 1.03 times less risky than TOREX SEMICONDUCTOR. It trades about 0.23 of its potential returns per unit of risk. TOREX SEMICONDUCTOR LTD is currently generating about 0.06 per unit of risk. If you would invest  12,200  in Brinker International on October 13, 2024 and sell it today you would earn a total of  1,300  from holding Brinker International or generate 10.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Brinker International  vs.  TOREX SEMICONDUCTOR LTD

Brinker International

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Brinker International are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Brinker International reported solid returns over the last few months and may actually be approaching a breakup point.

TOREX SEMICONDUCTOR LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TOREX SEMICONDUCTOR LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Brinker International and TOREX SEMICONDUCTOR

The main advantage of trading using opposite Brinker International and TOREX SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinker International position performs unexpectedly, TOREX SEMICONDUCTOR 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 TOREX SEMICONDUCTOR will offset losses from the drop in TOREX SEMICONDUCTOR's long position.

The idea behind Brinker International and TOREX SEMICONDUCTOR LTD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.