Correlation Between Texas Roadhouse and Intelligent Group

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

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

Diversification Opportunities for Texas Roadhouse and Intelligent Group

-0.08

Correlation Coefficient

Texas Roadhouse  Intelligent Group

Good diversification

The 3 months correlation between Texas and Intelligent is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Texas Roadhouse and Intelligent Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intelligent Group 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 Intelligent Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intelligent Group has no effect on the direction of Texas Roadhouse i.e., Texas Roadhouse and Intelligent Group go up and down completely randomly.

Pair Corralation between Texas Roadhouse and Intelligent Group

Given the investment horizon of 90 days Texas Roadhouse is expected to generate 0.24 times more return on investment than Intelligent Group. However, Texas Roadhouse is 4.21 times less risky than Intelligent Group. It trades about 0.09 of its potential returns per unit of risk. Intelligent Group Limited is currently generating about -0.08 per unit of risk. If you would invest  10,828  in Texas Roadhouse on October 24, 2024 and sell it today you would earn a total of  7,176  from holding Texas Roadhouse or generate 66.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	51.34%
Values	Daily Returns

Texas Roadhouse  vs.  Intelligent Group Limited

Texas Roadhouse

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Texas Roadhouse has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Intelligent Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intelligent Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively steady which may send shares a bit higher in February 2025. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

Pair Trading with Texas Roadhouse and Intelligent Group

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

The idea behind Texas Roadhouse and Intelligent Group Limited 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.