Correlation Between SAFEROADS HLDGS and TEXAS ROADHOUSE

Can any of the company-specific risk be diversified away by investing in both SAFEROADS HLDGS and TEXAS ROADHOUSE 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 SAFEROADS HLDGS and TEXAS ROADHOUSE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SAFEROADS HLDGS and TEXAS ROADHOUSE, you can compare the effects of market volatilities on SAFEROADS HLDGS and TEXAS ROADHOUSE 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 SAFEROADS HLDGS with a short position of TEXAS ROADHOUSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAFEROADS HLDGS and TEXAS ROADHOUSE.

Diversification Opportunities for SAFEROADS HLDGS and TEXAS ROADHOUSE

0.0

Correlation Coefficient

SAFEROADS HLDGS  TEXAS ROADHOUSE

Pay attention - limited upside

The 3 months correlation between SAFEROADS and TEXAS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SAFEROADS HLDGS and TEXAS ROADHOUSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TEXAS ROADHOUSE and SAFEROADS HLDGS 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 SAFEROADS HLDGS are associated (or correlated) with TEXAS ROADHOUSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TEXAS ROADHOUSE has no effect on the direction of SAFEROADS HLDGS i.e., SAFEROADS HLDGS and TEXAS ROADHOUSE go up and down completely randomly.

Pair Corralation between SAFEROADS HLDGS and TEXAS ROADHOUSE

If you would invest  13.00  in SAFEROADS HLDGS on October 11, 2024 and sell it today you would earn a total of  0.00  from holding SAFEROADS HLDGS or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

SAFEROADS HLDGS  vs.  TEXAS ROADHOUSE

SAFEROADS HLDGS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SAFEROADS HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, SAFEROADS HLDGS is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

TEXAS ROADHOUSE

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TEXAS ROADHOUSE are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, TEXAS ROADHOUSE may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with SAFEROADS HLDGS and TEXAS ROADHOUSE

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

The idea behind SAFEROADS HLDGS and TEXAS ROADHOUSE 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.