Correlation Between TEXAS ROADHOUSE and Gecina SA

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

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

Diversification Opportunities for TEXAS ROADHOUSE and Gecina SA

-0.25

Correlation Coefficient

TEXAS ROADHOUSE  Gecina SA

Very good diversification

The 3 months correlation between TEXAS and Gecina is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding TEXAS ROADHOUSE and Gecina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gecina SA 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 Gecina SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gecina SA has no effect on the direction of TEXAS ROADHOUSE i.e., TEXAS ROADHOUSE and Gecina SA go up and down completely randomly.

Pair Corralation between TEXAS ROADHOUSE and Gecina SA

Assuming the 90 days trading horizon TEXAS ROADHOUSE is expected to under-perform the Gecina SA. In addition to that, TEXAS ROADHOUSE is 1.02 times more volatile than Gecina SA. It trades about -0.08 of its total potential returns per unit of risk. Gecina SA is currently generating about 0.08 per unit of volatility. If you would invest  8,935  in Gecina SA on October 26, 2024 and sell it today you would earn a total of  125.00  from holding Gecina SA or generate 1.4% return on investment over 90 days.

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

TEXAS ROADHOUSE  vs.  Gecina SA

TEXAS ROADHOUSE

Risk-Adjusted Performance

0 of 100

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 rather sound basic indicators, TEXAS ROADHOUSE is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Gecina SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gecina SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with TEXAS ROADHOUSE and Gecina SA

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

The idea behind TEXAS ROADHOUSE and Gecina SA 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.