Correlation Between Intelligent Group and Texas Roadhouse

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

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

Diversification Opportunities for Intelligent Group and Texas Roadhouse

-0.08

Correlation Coefficient

Intelligent Group  Texas Roadhouse

Good diversification

The 3 months correlation between Intelligent and Texas is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Intelligent Group Limited and Texas Roadhouse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Texas Roadhouse and Intelligent Group 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 Intelligent Group 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 Intelligent Group i.e., Intelligent Group and Texas Roadhouse go up and down completely randomly.

Pair Corralation between Intelligent Group and Texas Roadhouse

Given the investment horizon of 90 days Intelligent Group Limited is expected to under-perform the Texas Roadhouse. In addition to that, Intelligent Group is 3.59 times more volatile than Texas Roadhouse. It trades about -0.04 of its total potential returns per unit of risk. Texas Roadhouse is currently generating about 0.01 per unit of volatility. If you would invest  18,033  in Texas Roadhouse on October 24, 2024 and sell it today you would earn a total of  47.00  from holding Texas Roadhouse or generate 0.26% return on investment over 90 days.

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

Intelligent Group Limited  vs.  Texas Roadhouse

Intelligent Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intelligent Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively steady which may send shares a bit higher in February 2025. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

Texas Roadhouse

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Texas Roadhouse has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Intelligent Group and Texas Roadhouse

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

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.