Correlation Between Flanigans Enterprises and Cheesecake Factory
Can any of the company-specific risk be diversified away by investing in both Flanigans Enterprises and Cheesecake Factory 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 Flanigans Enterprises and Cheesecake Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flanigans Enterprises and The Cheesecake Factory, you can compare the effects of market volatilities on Flanigans Enterprises and Cheesecake Factory 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 Flanigans Enterprises with a short position of Cheesecake Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flanigans Enterprises and Cheesecake Factory.
Diversification Opportunities for Flanigans Enterprises and Cheesecake Factory
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Flanigans and Cheesecake is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Flanigans Enterprises and The Cheesecake Factory in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Cheesecake Factory and Flanigans Enterprises 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 Flanigans Enterprises are associated (or correlated) with Cheesecake Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Cheesecake Factory has no effect on the direction of Flanigans Enterprises i.e., Flanigans Enterprises and Cheesecake Factory go up and down completely randomly.
Pair Corralation between Flanigans Enterprises and Cheesecake Factory
Considering the 90-day investment horizon Flanigans Enterprises is expected to under-perform the Cheesecake Factory. But the stock apears to be less risky and, when comparing its historical volatility, Flanigans Enterprises is 2.48 times less risky than Cheesecake Factory. The stock trades about -0.14 of its potential returns per unit of risk. The The Cheesecake Factory is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 3,895 in The Cheesecake Factory on September 13, 2024 and sell it today you would earn a total of 1,112 from holding The Cheesecake Factory or generate 28.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 92.86% |
| Values | Daily Returns |
Flanigans Enterprises vs. The Cheesecake Factory
Performance |
| Timeline |
| Flanigans Enterprises |
| The Cheesecake Factory |
Flanigans Enterprises and Cheesecake Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flanigans Enterprises and Cheesecake Factory
The main advantage of trading using opposite Flanigans Enterprises and Cheesecake Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flanigans Enterprises position performs unexpectedly, Cheesecake Factory 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 Cheesecake Factory will offset losses from the drop in Cheesecake Factory's long position.| Flanigans Enterprises vs. Good Times Restaurants | Flanigans Enterprises vs. Auburn National Bancorporation |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |