Correlation Between Texas Roadhouse and Bukit Jalil

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

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

Diversification Opportunities for Texas Roadhouse and Bukit Jalil

0.0

Correlation Coefficient

Texas Roadhouse  Bukit Jalil

Pay attention - limited upside

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

Pair Corralation between Texas Roadhouse and Bukit Jalil

Given the investment horizon of 90 days Texas Roadhouse is expected to under-perform the Bukit Jalil. But the stock apears to be less risky and, when comparing its historical volatility, Texas Roadhouse is 61.82 times less risky than Bukit Jalil. The stock trades about -0.21 of its potential returns per unit of risk. The Bukit Jalil Global is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  2.66  in Bukit Jalil Global on October 10, 2024 and sell it today you would lose (0.12) from holding Bukit Jalil Global or give up 4.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	70.0%
Values	Daily Returns

Texas Roadhouse  vs.  Bukit Jalil Global

Texas Roadhouse

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Texas Roadhouse are ranked lower than 4 (%) 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.

Bukit Jalil Global

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bukit Jalil Global are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Bukit Jalil showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Texas Roadhouse and Bukit Jalil

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

The idea behind Texas Roadhouse and Bukit Jalil Global 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.