Correlation Between Texas Roadhouse and SCHALTBAU HOLDING

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

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

Diversification Opportunities for Texas Roadhouse and SCHALTBAU HOLDING

-0.81

Correlation Coefficient

Texas Roadhouse  SCHALTBAU HOLDING

Pay attention - limited upside

The 3 months correlation between Texas and SCHALTBAU is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Texas Roadhouse and SCHALTBAU HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCHALTBAU HOLDING 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 SCHALTBAU HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCHALTBAU HOLDING has no effect on the direction of Texas Roadhouse i.e., Texas Roadhouse and SCHALTBAU HOLDING go up and down completely randomly.

Pair Corralation between Texas Roadhouse and SCHALTBAU HOLDING

Assuming the 90 days horizon Texas Roadhouse is expected to under-perform the SCHALTBAU HOLDING. In addition to that, Texas Roadhouse is 1.22 times more volatile than SCHALTBAU HOLDING. It trades about -0.11 of its total potential returns per unit of risk. SCHALTBAU HOLDING is currently generating about 0.06 per unit of volatility. If you would invest  6,000  in SCHALTBAU HOLDING on December 22, 2024 and sell it today you would earn a total of  300.00  from holding SCHALTBAU HOLDING or generate 5.0% return on investment over 90 days.

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

Texas Roadhouse  vs.  SCHALTBAU HOLDING

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

SCHALTBAU HOLDING

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SCHALTBAU HOLDING are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, SCHALTBAU HOLDING is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Texas Roadhouse and SCHALTBAU HOLDING

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

The idea behind Texas Roadhouse and SCHALTBAU HOLDING 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.