Correlation Between Texas Roadhouse and Aegean Airlines

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

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

Diversification Opportunities for Texas Roadhouse and Aegean Airlines

-0.65

Correlation Coefficient

Texas Roadhouse  Aegean Airlines

Excellent diversification

The 3 months correlation between Texas and Aegean is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Texas Roadhouse and Aegean Airlines SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegean Airlines SA 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 Aegean Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegean Airlines SA has no effect on the direction of Texas Roadhouse i.e., Texas Roadhouse and Aegean Airlines go up and down completely randomly.

Pair Corralation between Texas Roadhouse and Aegean Airlines

Given the investment horizon of 90 days Texas Roadhouse is expected to under-perform the Aegean Airlines. In addition to that, Texas Roadhouse is 1.35 times more volatile than Aegean Airlines SA. It trades about -0.32 of its total potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.21 per unit of volatility. If you would invest  1,085  in Aegean Airlines SA on September 28, 2024 and sell it today you would lose (60.00) from holding Aegean Airlines SA or give up 5.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Texas Roadhouse  vs.  Aegean Airlines SA

Texas Roadhouse

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Texas Roadhouse are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Texas Roadhouse is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Aegean Airlines SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aegean Airlines SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Texas Roadhouse and Aegean Airlines

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

The idea behind Texas Roadhouse and Aegean Airlines SA 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.