Correlation Between Cheesecake Factory and Kaltura
Can any of the company-specific risk be diversified away by investing in both Cheesecake Factory and Kaltura 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 Kaltura 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 Kaltura, you can compare the effects of market volatilities on Cheesecake Factory and Kaltura 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 Kaltura. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheesecake Factory and Kaltura.
Diversification Opportunities for Cheesecake Factory and Kaltura
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cheesecake and Kaltura is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and Kaltura in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaltura 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 Kaltura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaltura has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and Kaltura go up and down completely randomly.
Pair Corralation between Cheesecake Factory and Kaltura
Given the investment horizon of 90 days The Cheesecake Factory is expected to generate 0.58 times more return on investment than Kaltura. However, The Cheesecake Factory is 1.72 times less risky than Kaltura. It trades about 0.05 of its potential returns per unit of risk. Kaltura is currently generating about 0.03 per unit of risk. If you would invest 3,167 in The Cheesecake Factory on September 2, 2024 and sell it today you would earn a total of 1,897 from holding The Cheesecake Factory or generate 59.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Cheesecake Factory vs. Kaltura
Performance |
| Timeline |
| The Cheesecake Factory |
| Kaltura |
Cheesecake Factory and Kaltura Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheesecake Factory and Kaltura
The main advantage of trading using opposite Cheesecake Factory and Kaltura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheesecake Factory position performs unexpectedly, Kaltura 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 Kaltura will offset losses from the drop in Kaltura's long position.The idea behind The Cheesecake Factory and Kaltura pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Kaltura vs. Evertec | Kaltura vs. Consensus Cloud Solutions | Kaltura vs. Global Blue Group | Kaltura vs. Lesaka Technologies |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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