Correlation Between Texas Roadhouse and ANTA SPORTS

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

By analyzing existing cross correlation between Texas Roadhouse and ANTA SPORTS PRODUCT, you can compare the effects of market volatilities on Texas Roadhouse and ANTA SPORTS 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 ANTA SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Texas Roadhouse and ANTA SPORTS.

Diversification Opportunities for Texas Roadhouse and ANTA SPORTS

-0.75

Correlation Coefficient

Texas Roadhouse  ANTA SPORTS

Pay attention - limited upside

The 3 months correlation between Texas and ANTA is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Texas Roadhouse and ANTA SPORTS PRODUCT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA SPORTS PRODUCT 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 ANTA SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTA SPORTS PRODUCT has no effect on the direction of Texas Roadhouse i.e., Texas Roadhouse and ANTA SPORTS go up and down completely randomly.

Pair Corralation between Texas Roadhouse and ANTA SPORTS

Assuming the 90 days horizon Texas Roadhouse is expected to under-perform the ANTA SPORTS. But the stock apears to be less risky and, when comparing its historical volatility, Texas Roadhouse is 2.47 times less risky than ANTA SPORTS. The stock trades about -0.38 of its potential returns per unit of risk. The ANTA SPORTS PRODUCT is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  947.00  in ANTA SPORTS PRODUCT on October 5, 2024 and sell it today you would earn a total of  3.00  from holding ANTA SPORTS PRODUCT or generate 0.32% return on investment over 90 days.

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

Texas Roadhouse  vs.  ANTA SPORTS PRODUCT

Texas Roadhouse

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Texas Roadhouse has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly unsteady basic indicators, Texas Roadhouse may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ANTA SPORTS PRODUCT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANTA SPORTS PRODUCT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Texas Roadhouse and ANTA SPORTS

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

The idea behind Texas Roadhouse and ANTA SPORTS PRODUCT 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..