Correlation Between TEXAS ROADHOUSE and Mitie Group
Can any of the company-specific risk be diversified away by investing in both TEXAS ROADHOUSE and Mitie Group 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 Mitie Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TEXAS ROADHOUSE and Mitie Group PLC, you can compare the effects of market volatilities on TEXAS ROADHOUSE and Mitie Group 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 Mitie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of TEXAS ROADHOUSE and Mitie Group.
Diversification Opportunities for TEXAS ROADHOUSE and Mitie Group
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TEXAS and Mitie is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding TEXAS ROADHOUSE and Mitie Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitie Group PLC 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 Mitie Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitie Group PLC has no effect on the direction of TEXAS ROADHOUSE i.e., TEXAS ROADHOUSE and Mitie Group go up and down completely randomly.
Pair Corralation between TEXAS ROADHOUSE and Mitie Group
Assuming the 90 days trading horizon TEXAS ROADHOUSE is expected to under-perform the Mitie Group. But the stock apears to be less risky and, when comparing its historical volatility, TEXAS ROADHOUSE is 1.0 times less risky than Mitie Group. The stock trades about -0.13 of its potential returns per unit of risk. The Mitie Group PLC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 117,800 in Mitie Group PLC on December 2, 2024 and sell it today you would earn a total of 2,400 from holding Mitie Group PLC or generate 2.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
TEXAS ROADHOUSE vs. Mitie Group PLC
Performance |
Timeline |
TEXAS ROADHOUSE |
Mitie Group PLC |
TEXAS ROADHOUSE and Mitie Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TEXAS ROADHOUSE and Mitie Group
The main advantage of trading using opposite TEXAS ROADHOUSE and Mitie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TEXAS ROADHOUSE position performs unexpectedly, Mitie Group 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 Mitie Group will offset losses from the drop in Mitie Group's long position.TEXAS ROADHOUSE vs. Sunny Optical Technology | TEXAS ROADHOUSE vs. Sabre Insurance Group | TEXAS ROADHOUSE vs. ZURICH INSURANCE GROUP | TEXAS ROADHOUSE vs. Ping An Insurance |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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