Correlation Between Cheesecake Factory and Chuys Holdings
Can any of the company-specific risk be diversified away by investing in both Cheesecake Factory and Chuys Holdings 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 Chuys Holdings 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 Chuys Holdings, you can compare the effects of market volatilities on Cheesecake Factory and Chuys Holdings 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 Chuys Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheesecake Factory and Chuys Holdings.
Diversification Opportunities for Cheesecake Factory and Chuys Holdings
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cheesecake and Chuys is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and Chuys Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuys Holdings 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 Chuys Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuys Holdings has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and Chuys Holdings go up and down completely randomly.
Pair Corralation between Cheesecake Factory and Chuys Holdings
If you would invest 4,301 in The Cheesecake Factory on August 27, 2024 and sell it today you would earn a total of 355.00 from holding The Cheesecake Factory or generate 8.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
The Cheesecake Factory vs. Chuys Holdings
Performance |
| Timeline |
| The Cheesecake Factory |
| Chuys Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Strong
Cheesecake Factory and Chuys Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheesecake Factory and Chuys Holdings
The main advantage of trading using opposite Cheesecake Factory and Chuys Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheesecake Factory position performs unexpectedly, Chuys Holdings 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 Chuys Holdings will offset losses from the drop in Chuys Holdings' long position.| Cheesecake Factory vs. Dine Brands Global | Cheesecake Factory vs. Bloomin Brands | Cheesecake Factory vs. BJs Restaurants | Cheesecake Factory vs. Brinker International |
| Chuys Holdings vs. Brinker International | Chuys Holdings vs. Bloomin Brands | Chuys Holdings vs. FAT Brands | Chuys Holdings vs. Potbelly Co |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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