Correlation Between Cheesecake Factory and LianDi Clean
Can any of the company-specific risk be diversified away by investing in both Cheesecake Factory and LianDi Clean 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 LianDi Clean 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 LianDi Clean Technology, you can compare the effects of market volatilities on Cheesecake Factory and LianDi Clean 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 LianDi Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheesecake Factory and LianDi Clean.
Diversification Opportunities for Cheesecake Factory and LianDi Clean
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cheesecake and LianDi is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and LianDi Clean Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LianDi Clean Technology 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 LianDi Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LianDi Clean Technology has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and LianDi Clean go up and down completely randomly.
Pair Corralation between Cheesecake Factory and LianDi Clean
Given the investment horizon of 90 days The Cheesecake Factory is expected to generate 0.2 times more return on investment than LianDi Clean. However, The Cheesecake Factory is 5.12 times less risky than LianDi Clean. It trades about 0.31 of its potential returns per unit of risk. LianDi Clean Technology is currently generating about -0.21 per unit of risk. If you would invest 4,948 in The Cheesecake Factory on November 4, 2024 and sell it today you would earn a total of 667.00 from holding The Cheesecake Factory or generate 13.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
The Cheesecake Factory vs. LianDi Clean Technology
Performance |
| Timeline |
| The Cheesecake Factory |
| LianDi Clean Technology |
Cheesecake Factory and LianDi Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheesecake Factory and LianDi Clean
The main advantage of trading using opposite Cheesecake Factory and LianDi Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheesecake Factory position performs unexpectedly, LianDi Clean 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 LianDi Clean will offset losses from the drop in LianDi Clean's long position.| Cheesecake Factory vs. Dine Brands Global | Cheesecake Factory vs. Bloomin Brands | Cheesecake Factory vs. BJs Restaurants | Cheesecake Factory vs. Brinker International |
| LianDi Clean vs. Enerflex | LianDi Clean vs. Natural Gas Services | LianDi Clean vs. Archrock | LianDi Clean vs. Geospace 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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