Correlation Between Cheesecake Factory and First Republic
Can any of the company-specific risk be diversified away by investing in both Cheesecake Factory and First Republic 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 First Republic 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 First Republic Bank, you can compare the effects of market volatilities on Cheesecake Factory and First Republic 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 First Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheesecake Factory and First Republic.
Diversification Opportunities for Cheesecake Factory and First Republic
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cheesecake and First is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and First Republic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Republic Bank 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 First Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Republic Bank has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and First Republic go up and down completely randomly.
Pair Corralation between Cheesecake Factory and First Republic
If you would invest 3,871 in The Cheesecake Factory on August 31, 2024 and sell it today you would earn a total of 1,103 from holding The Cheesecake Factory or generate 28.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.59% |
| Values | Daily Returns |
The Cheesecake Factory vs. First Republic Bank
Performance |
| Timeline |
| The Cheesecake Factory |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cheesecake Factory and First Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheesecake Factory and First Republic
The main advantage of trading using opposite Cheesecake Factory and First Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheesecake Factory position performs unexpectedly, First Republic 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 First Republic will offset losses from the drop in First Republic's long position.| Cheesecake Factory vs. Wingstop | Cheesecake Factory vs. The Wendys Co | Cheesecake Factory vs. RLJ Lodging Trust | Cheesecake Factory vs. Aquagold International |
| First Republic vs. Delek Drilling | First Republic vs. Suntory Beverage Food | First Republic vs. RBC Bearings Incorporated | First Republic vs. Weyco 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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