Correlation Between Texas Roadhouse and Ming Le

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

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

Diversification Opportunities for Texas Roadhouse and Ming Le

0.83

Correlation Coefficient

Texas Roadhouse  Ming Le

Very poor diversification

The 3 months correlation between Texas and Ming is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Texas Roadhouse and Ming Le Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ming Le Sports 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 Ming Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ming Le Sports has no effect on the direction of Texas Roadhouse i.e., Texas Roadhouse and Ming Le go up and down completely randomly.

Pair Corralation between Texas Roadhouse and Ming Le

If you would invest  109.00  in Ming Le Sports on November 29, 2024 and sell it today you would earn a total of  0.00  from holding Ming Le Sports or generate 0.0% return on investment over 90 days.

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

Texas Roadhouse  vs.  Ming Le Sports

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. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Ming Le Sports

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ming Le Sports 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 comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Texas Roadhouse and Ming Le

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

The idea behind Texas Roadhouse and Ming Le Sports 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 Global Correlations module to find global opportunities by holding instruments from different markets.