Correlation Between TEXAS ROADHOUSE and Cintas

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

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

Diversification Opportunities for TEXAS ROADHOUSE and Cintas

0.03

Correlation Coefficient

TEXAS ROADHOUSE  Cintas

Significant diversification

The 3 months correlation between TEXAS and Cintas is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding TEXAS ROADHOUSE and Cintas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cintas 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 Cintas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cintas has no effect on the direction of TEXAS ROADHOUSE i.e., TEXAS ROADHOUSE and Cintas go up and down completely randomly.

Pair Corralation between TEXAS ROADHOUSE and Cintas

Assuming the 90 days trading horizon TEXAS ROADHOUSE is expected to under-perform the Cintas. In addition to that, TEXAS ROADHOUSE is 1.64 times more volatile than Cintas. It trades about -0.14 of its total potential returns per unit of risk. Cintas is currently generating about -0.08 per unit of volatility. If you would invest  16,585  in Cintas on August 24, 2025 and sell it today you would lose (435.00) from holding Cintas or give up 2.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

TEXAS ROADHOUSE  vs.  Cintas

TEXAS ROADHOUSE

Risk-Adjusted Performance

Weakest

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

Cintas

Risk-Adjusted Performance

Weakest

Over the last 90 days Cintas has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with TEXAS ROADHOUSE and Cintas

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

The idea behind TEXAS ROADHOUSE and Cintas 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.