Correlation Between TEXAS ROADHOUSE and GAZTRTECHNIUADR1/5EO01

Can any of the company-specific risk be diversified away by investing in both TEXAS ROADHOUSE and GAZTRTECHNIUADR1/5EO01 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 GAZTRTECHNIUADR1/5EO01 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TEXAS ROADHOUSE and GAZTRTECHNIUADR15EO01, you can compare the effects of market volatilities on TEXAS ROADHOUSE and GAZTRTECHNIUADR1/5EO01 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 GAZTRTECHNIUADR1/5EO01. Check out your portfolio center. Please also check ongoing floating volatility patterns of TEXAS ROADHOUSE and GAZTRTECHNIUADR1/5EO01.

Diversification Opportunities for TEXAS ROADHOUSE and GAZTRTECHNIUADR1/5EO01

0.67

Correlation Coefficient

TEXAS ROADHOUSE  GAZTRTECHNIUADR1/5EO01

Poor diversification

The 3 months correlation between TEXAS and GAZTRTECHNIUADR1/5EO01 is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding TEXAS ROADHOUSE and GAZTRTECHNIUADR15EO01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAZTRTECHNIUADR1/5EO01 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 GAZTRTECHNIUADR1/5EO01. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAZTRTECHNIUADR1/5EO01 has no effect on the direction of TEXAS ROADHOUSE i.e., TEXAS ROADHOUSE and GAZTRTECHNIUADR1/5EO01 go up and down completely randomly.

Pair Corralation between TEXAS ROADHOUSE and GAZTRTECHNIUADR1/5EO01

Assuming the 90 days trading horizon TEXAS ROADHOUSE is expected to generate 2.04 times less return on investment than GAZTRTECHNIUADR1/5EO01. In addition to that, TEXAS ROADHOUSE is 1.15 times more volatile than GAZTRTECHNIUADR15EO01. It trades about 0.09 of its total potential returns per unit of risk. GAZTRTECHNIUADR15EO01 is currently generating about 0.21 per unit of volatility. If you would invest  2,656  in GAZTRTECHNIUADR15EO01 on April 23, 2025 and sell it today you would earn a total of  624.00  from holding GAZTRTECHNIUADR15EO01 or generate 23.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

TEXAS ROADHOUSE  vs.  GAZTRTECHNIUADR15EO01

TEXAS ROADHOUSE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TEXAS ROADHOUSE are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, TEXAS ROADHOUSE may actually be approaching a critical reversion point that can send shares even higher in August 2025.

GAZTRTECHNIUADR1/5EO01

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GAZTRTECHNIUADR15EO01 are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, GAZTRTECHNIUADR1/5EO01 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TEXAS ROADHOUSE and GAZTRTECHNIUADR1/5EO01

The main advantage of trading using opposite TEXAS ROADHOUSE and GAZTRTECHNIUADR1/5EO01 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TEXAS ROADHOUSE position performs unexpectedly, GAZTRTECHNIUADR1/5EO01 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 GAZTRTECHNIUADR1/5EO01 will offset losses from the drop in GAZTRTECHNIUADR1/5EO01's long position.

The idea behind TEXAS ROADHOUSE and GAZTRTECHNIUADR15EO01 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.

Check out your portfolio center.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.