Correlation Between Cheesecake Factory and GEN Restaurant
Can any of the company-specific risk be diversified away by investing in both Cheesecake Factory and GEN Restaurant 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 GEN Restaurant 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 GEN Restaurant Group,, you can compare the effects of market volatilities on Cheesecake Factory and GEN Restaurant 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 GEN Restaurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheesecake Factory and GEN Restaurant.
Diversification Opportunities for Cheesecake Factory and GEN Restaurant
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cheesecake and GEN is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and GEN Restaurant Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEN Restaurant Group, 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 GEN Restaurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEN Restaurant Group, has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and GEN Restaurant go up and down completely randomly.
Pair Corralation between Cheesecake Factory and GEN Restaurant
Given the investment horizon of 90 days The Cheesecake Factory is expected to generate 0.66 times more return on investment than GEN Restaurant. However, The Cheesecake Factory is 1.5 times less risky than GEN Restaurant. It trades about 0.12 of its potential returns per unit of risk. GEN Restaurant Group, is currently generating about -0.03 per unit of risk. If you would invest 3,775 in The Cheesecake Factory on October 26, 2024 and sell it today you would earn a total of 1,378 from holding The Cheesecake Factory or generate 36.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Cheesecake Factory vs. GEN Restaurant Group,
Performance |
| Timeline |
| The Cheesecake Factory |
| GEN Restaurant Group, |
Cheesecake Factory and GEN Restaurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheesecake Factory and GEN Restaurant
The main advantage of trading using opposite Cheesecake Factory and GEN Restaurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheesecake Factory position performs unexpectedly, GEN Restaurant 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 GEN Restaurant will offset losses from the drop in GEN Restaurant's long position.| Cheesecake Factory vs. Dine Brands Global | Cheesecake Factory vs. Bloomin Brands | Cheesecake Factory vs. BJs Restaurants | Cheesecake Factory vs. Brinker International |
| GEN Restaurant vs. Compania Cervecerias Unidas | GEN Restaurant vs. SBM Offshore NV | GEN Restaurant vs. Boston Beer | GEN Restaurant vs. The Cheesecake Factory |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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