Correlation Between Cheesecake Factory and Everi Holdings
Can any of the company-specific risk be diversified away by investing in both Cheesecake Factory and Everi 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 Everi 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 Everi Holdings, you can compare the effects of market volatilities on Cheesecake Factory and Everi 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 Everi Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheesecake Factory and Everi Holdings.
Diversification Opportunities for Cheesecake Factory and Everi Holdings
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cheesecake and Everi is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and Everi Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everi 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 Everi Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everi Holdings has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and Everi Holdings go up and down completely randomly.
Pair Corralation between Cheesecake Factory and Everi Holdings
Given the investment horizon of 90 days The Cheesecake Factory is expected to generate 0.73 times more return on investment than Everi Holdings. However, The Cheesecake Factory is 1.37 times less risky than Everi Holdings. It trades about 0.05 of its potential returns per unit of risk. Everi Holdings is currently generating about -0.01 per unit of risk. If you would invest 3,555 in The Cheesecake Factory on November 1, 2024 and sell it today you would earn a total of 2,034 from holding The Cheesecake Factory or generate 57.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Cheesecake Factory vs. Everi Holdings
Performance |
| Timeline |
| The Cheesecake Factory |
| Everi Holdings |
Cheesecake Factory and Everi Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheesecake Factory and Everi Holdings
The main advantage of trading using opposite Cheesecake Factory and Everi Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheesecake Factory position performs unexpectedly, Everi 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 Everi Holdings will offset losses from the drop in Everi Holdings' long position.| Cheesecake Factory vs. Dine Brands Global | Cheesecake Factory vs. Bloomin Brands | Cheesecake Factory vs. BJs Restaurants | Cheesecake Factory vs. Brinker International |
| Everi Holdings vs. Accel Entertainment | Everi Holdings vs. Light Wonder | Everi Holdings vs. Inspired Entertainment | Everi Holdings vs. International Game Technology |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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