Correlation Between Cheesecake Factory and Micro Imaging
Can any of the company-specific risk be diversified away by investing in both Cheesecake Factory and Micro Imaging 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 Micro Imaging 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 Micro Imaging Technology, you can compare the effects of market volatilities on Cheesecake Factory and Micro Imaging 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 Micro Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheesecake Factory and Micro Imaging.
Diversification Opportunities for Cheesecake Factory and Micro Imaging
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cheesecake and Micro is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and Micro Imaging Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micro Imaging 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 Micro Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micro Imaging Technology has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and Micro Imaging go up and down completely randomly.
Pair Corralation between Cheesecake Factory and Micro Imaging
Given the investment horizon of 90 days The Cheesecake Factory is expected to generate 0.53 times more return on investment than Micro Imaging. However, The Cheesecake Factory is 1.87 times less risky than Micro Imaging. It trades about 0.09 of its potential returns per unit of risk. Micro Imaging Technology is currently generating about -0.06 per unit of risk. If you would invest 3,183 in The Cheesecake Factory on September 14, 2024 and sell it today you would earn a total of 1,805 from holding The Cheesecake Factory or generate 56.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Cheesecake Factory vs. Micro Imaging Technology
Performance |
| Timeline |
| The Cheesecake Factory |
| Micro Imaging Technology |
Cheesecake Factory and Micro Imaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheesecake Factory and Micro Imaging
The main advantage of trading using opposite Cheesecake Factory and Micro Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheesecake Factory position performs unexpectedly, Micro Imaging 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 Micro Imaging will offset losses from the drop in Micro Imaging's long position.| Cheesecake Factory vs. Dine Brands Global | Cheesecake Factory vs. Bloomin Brands | Cheesecake Factory vs. BJs Restaurants | Cheesecake Factory vs. Brinker International |
| Micro Imaging vs. Constellation Brands Class | Micro Imaging vs. The Cheesecake Factory | Micro Imaging vs. Westrock Coffee | Micro Imaging vs. Playa Hotels Resorts |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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