Correlation Between Cheesecake Factory and Flanigans Enterprises
Can any of the company-specific risk be diversified away by investing in both Cheesecake Factory and Flanigans Enterprises 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 Cheesecake Factory and Flanigans Enterprises into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Cheesecake Factory and Flanigans Enterprises, you can compare the effects of market volatilities on Cheesecake Factory and Flanigans Enterprises 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 Cheesecake Factory with a short position of Flanigans Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheesecake Factory and Flanigans Enterprises.
Diversification Opportunities for Cheesecake Factory and Flanigans Enterprises
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cheesecake and Flanigans is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and Flanigans Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flanigans Enterprises and Cheesecake Factory 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 The Cheesecake Factory are associated (or correlated) with Flanigans Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flanigans Enterprises has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and Flanigans Enterprises go up and down completely randomly.
Pair Corralation between Cheesecake Factory and Flanigans Enterprises
Given the investment horizon of 90 days The Cheesecake Factory is expected to generate 2.48 times more return on investment than Flanigans Enterprises. However, Cheesecake Factory is 2.48 times more volatile than Flanigans Enterprises. It trades about 0.26 of its potential returns per unit of risk. Flanigans Enterprises is currently generating about -0.14 per unit of risk. 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 |
The Cheesecake Factory vs. Flanigans Enterprises
Performance |
| Timeline |
| The Cheesecake Factory |
| Flanigans Enterprises |
Cheesecake Factory and Flanigans Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheesecake Factory and Flanigans Enterprises
The main advantage of trading using opposite Cheesecake Factory and Flanigans Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheesecake Factory position performs unexpectedly, Flanigans Enterprises 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 Flanigans Enterprises will offset losses from the drop in Flanigans Enterprises' long position.The idea behind The Cheesecake Factory and Flanigans Enterprises 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.| 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |