Correlation Between TEXAS ROADHOUSE and Expeditors International

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

By analyzing existing cross correlation between TEXAS ROADHOUSE and Expeditors International of, you can compare the effects of market volatilities on TEXAS ROADHOUSE and Expeditors International 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 Expeditors International. Check out your portfolio center. Please also check ongoing floating volatility patterns of TEXAS ROADHOUSE and Expeditors International.

Diversification Opportunities for TEXAS ROADHOUSE and Expeditors International

0.16

Correlation Coefficient

TEXAS ROADHOUSE  Expeditors International

Average diversification

The 3 months correlation between TEXAS and Expeditors is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding TEXAS ROADHOUSE and Expeditors International of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expeditors International 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 Expeditors International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expeditors International has no effect on the direction of TEXAS ROADHOUSE i.e., TEXAS ROADHOUSE and Expeditors International go up and down completely randomly.

Pair Corralation between TEXAS ROADHOUSE and Expeditors International

Assuming the 90 days trading horizon TEXAS ROADHOUSE is expected to under-perform the Expeditors International. In addition to that, TEXAS ROADHOUSE is 1.01 times more volatile than Expeditors International of. It trades about -0.09 of its total potential returns per unit of risk. Expeditors International of is currently generating about 0.01 per unit of volatility. If you would invest  10,585  in Expeditors International of on December 22, 2024 and sell it today you would earn a total of  65.00  from holding Expeditors International of or generate 0.61% return on investment over 90 days.

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

TEXAS ROADHOUSE  vs.  Expeditors International of

TEXAS ROADHOUSE

Risk-Adjusted Performance

Very Weak

Over the last 90 days TEXAS ROADHOUSE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Expeditors International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Expeditors International of are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Expeditors International is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with TEXAS ROADHOUSE and Expeditors International

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

The idea behind TEXAS ROADHOUSE and Expeditors International of 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.