Correlation Between Cheesecake Factory and Brandywine Realty
Can any of the company-specific risk be diversified away by investing in both Cheesecake Factory and Brandywine Realty 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 Brandywine Realty 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 Brandywine Realty Trust, you can compare the effects of market volatilities on Cheesecake Factory and Brandywine Realty 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 Brandywine Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheesecake Factory and Brandywine Realty.
Diversification Opportunities for Cheesecake Factory and Brandywine Realty
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cheesecake and Brandywine is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and Brandywine Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandywine Realty Trust 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 Brandywine Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandywine Realty Trust has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and Brandywine Realty go up and down completely randomly.
Pair Corralation between Cheesecake Factory and Brandywine Realty
Given the investment horizon of 90 days The Cheesecake Factory is expected to generate 1.06 times more return on investment than Brandywine Realty. However, Cheesecake Factory is 1.06 times more volatile than Brandywine Realty Trust. It trades about 0.22 of its potential returns per unit of risk. Brandywine Realty Trust is currently generating about 0.11 per unit of risk. If you would invest 4,668 in The Cheesecake Factory on September 12, 2024 and sell it today you would earn a total of 410.00 from holding The Cheesecake Factory or generate 8.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Cheesecake Factory vs. Brandywine Realty Trust
Performance |
| Timeline |
| The Cheesecake Factory |
| Brandywine Realty Trust |
Cheesecake Factory and Brandywine Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheesecake Factory and Brandywine Realty
The main advantage of trading using opposite Cheesecake Factory and Brandywine Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheesecake Factory position performs unexpectedly, Brandywine Realty 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 Brandywine Realty will offset losses from the drop in Brandywine Realty's long position.| Cheesecake Factory vs. Dine Brands Global | Cheesecake Factory vs. Bloomin Brands | Cheesecake Factory vs. BJs Restaurants | Cheesecake Factory vs. Brinker International |
| Brandywine Realty vs. Douglas Emmett | Brandywine Realty vs. Kilroy Realty Corp | Brandywine Realty vs. Piedmont Office Realty | Brandywine Realty vs. City Office |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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