Correlation Between Cheesecake Factory and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Cheesecake Factory and Harmony Gold 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 Harmony Gold 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 Harmony Gold Mining, you can compare the effects of market volatilities on Cheesecake Factory and Harmony Gold 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 Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheesecake Factory and Harmony Gold.
Diversification Opportunities for Cheesecake Factory and Harmony Gold
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cheesecake and Harmony is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining 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 Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and Harmony Gold go up and down completely randomly.
Pair Corralation between Cheesecake Factory and Harmony Gold
Given the investment horizon of 90 days The Cheesecake Factory is expected to generate 0.49 times more return on investment than Harmony Gold. However, The Cheesecake Factory is 2.05 times less risky than Harmony Gold. It trades about 0.22 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.22 per unit of risk. If you would invest 4,596 in The Cheesecake Factory on September 1, 2024 and sell it today you would earn a total of 468.00 from holding The Cheesecake Factory or generate 10.18% 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. Harmony Gold Mining
Performance |
| Timeline |
| The Cheesecake Factory |
| Harmony Gold Mining |
Cheesecake Factory and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheesecake Factory and Harmony Gold
The main advantage of trading using opposite Cheesecake Factory and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheesecake Factory position performs unexpectedly, Harmony Gold 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 Harmony Gold will offset losses from the drop in Harmony Gold's long position.| Cheesecake Factory vs. The Wendys Co | Cheesecake Factory vs. Shake Shack | Cheesecake Factory vs. Papa Johns International | Cheesecake Factory vs. Darden Restaurants |
| Harmony Gold vs. Aurion Resources | Harmony Gold vs. Rio2 Limited | Harmony Gold vs. Palamina Corp | Harmony Gold vs. BTU Metals Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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