Correlation Between Texas Roadhouse and UNIQA INSURANCE

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

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

Diversification Opportunities for Texas Roadhouse and UNIQA INSURANCE

-0.48

Correlation Coefficient

Texas Roadhouse  UNIQA INSURANCE

Very good diversification

The 3 months correlation between Texas and UNIQA is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Texas Roadhouse and UNIQA INSURANCE GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIQA INSURANCE GR 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 UNIQA INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIQA INSURANCE GR has no effect on the direction of Texas Roadhouse i.e., Texas Roadhouse and UNIQA INSURANCE go up and down completely randomly.

Pair Corralation between Texas Roadhouse and UNIQA INSURANCE

Assuming the 90 days horizon Texas Roadhouse is expected to under-perform the UNIQA INSURANCE. In addition to that, Texas Roadhouse is 1.53 times more volatile than UNIQA INSURANCE GR. It trades about -0.31 of its total potential returns per unit of risk. UNIQA INSURANCE GR is currently generating about 0.37 per unit of volatility. If you would invest  711.00  in UNIQA INSURANCE GR on September 28, 2024 and sell it today you would earn a total of  55.00  from holding UNIQA INSURANCE GR or generate 7.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Texas Roadhouse  vs.  UNIQA INSURANCE GR

Texas Roadhouse

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Texas Roadhouse are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Texas Roadhouse reported solid returns over the last few months and may actually be approaching a breakup point.

UNIQA INSURANCE GR

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in UNIQA INSURANCE GR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, UNIQA INSURANCE is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Texas Roadhouse and UNIQA INSURANCE

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

The idea behind Texas Roadhouse and UNIQA INSURANCE GR 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.