Correlation Between Chuys Holdings and Texas Roadhouse

Can any of the company-specific risk be diversified away by investing in both Chuys Holdings 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 Chuys Holdings and Texas Roadhouse into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chuys Holdings and Texas Roadhouse, you can compare the effects of market volatilities on Chuys Holdings 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 Chuys Holdings with a short position of Texas Roadhouse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuys Holdings and Texas Roadhouse.

Diversification Opportunities for Chuys Holdings and Texas Roadhouse

0.42

Correlation Coefficient

Chuys Holdings  Texas Roadhouse

Very weak diversification

The 3 months correlation between Chuys and Texas is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Chuys Holdings and Texas Roadhouse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Texas Roadhouse and Chuys Holdings 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 Chuys Holdings 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 Chuys Holdings i.e., Chuys Holdings and Texas Roadhouse go up and down completely randomly.

Pair Corralation between Chuys Holdings and Texas Roadhouse

If you would invest  3,748  in Chuys Holdings on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Chuys Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	2.5%
Values	Daily Returns

Chuys Holdings  vs.  Texas Roadhouse

Chuys Holdings

Risk-Adjusted Performance

0 of 100

Excellent

Over the last 90 days Chuys Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Chuys Holdings is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Texas Roadhouse

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Texas Roadhouse are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Texas Roadhouse is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Chuys Holdings and Texas Roadhouse

The main advantage of trading using opposite Chuys Holdings and Texas Roadhouse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuys Holdings 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.

The idea behind Chuys Holdings and Texas Roadhouse 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.