Correlation Between Cheesecake Factory and Definitive Healthcare
Can any of the company-specific risk be diversified away by investing in both Cheesecake Factory and Definitive Healthcare 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 Definitive Healthcare 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 Definitive Healthcare Corp, you can compare the effects of market volatilities on Cheesecake Factory and Definitive Healthcare 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 Definitive Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheesecake Factory and Definitive Healthcare.
Diversification Opportunities for Cheesecake Factory and Definitive Healthcare
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cheesecake and Definitive is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and Definitive Healthcare Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Definitive Healthcare 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 Definitive Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Definitive Healthcare has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and Definitive Healthcare go up and down completely randomly.
Pair Corralation between Cheesecake Factory and Definitive Healthcare
Given the investment horizon of 90 days The Cheesecake Factory is expected to generate 0.72 times more return on investment than Definitive Healthcare. However, The Cheesecake Factory is 1.39 times less risky than Definitive Healthcare. It trades about 0.09 of its potential returns per unit of risk. Definitive Healthcare Corp is currently generating about 0.0 per unit of risk. If you would invest 4,832 in The Cheesecake Factory on September 14, 2024 and sell it today you would earn a total of 164.00 from holding The Cheesecake Factory or generate 3.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Cheesecake Factory vs. Definitive Healthcare Corp
Performance |
| Timeline |
| The Cheesecake Factory |
| Definitive Healthcare |
Cheesecake Factory and Definitive Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheesecake Factory and Definitive Healthcare
The main advantage of trading using opposite Cheesecake Factory and Definitive Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheesecake Factory position performs unexpectedly, Definitive Healthcare 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 Definitive Healthcare will offset losses from the drop in Definitive Healthcare's long position.| Cheesecake Factory vs. Dine Brands Global | Cheesecake Factory vs. Bloomin Brands | Cheesecake Factory vs. BJs Restaurants | Cheesecake Factory vs. Brinker International |
| Definitive Healthcare vs. National Research Corp | Definitive Healthcare vs. Evolent Health | Definitive Healthcare vs. Simulations Plus | Definitive Healthcare vs. Privia Health Group |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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