Correlation Between Cheesecake Factory and Niagara Mohawk
Can any of the company-specific risk be diversified away by investing in both Cheesecake Factory and Niagara Mohawk 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 Niagara Mohawk 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 Niagara Mohawk Power, you can compare the effects of market volatilities on Cheesecake Factory and Niagara Mohawk 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 Niagara Mohawk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheesecake Factory and Niagara Mohawk.
Diversification Opportunities for Cheesecake Factory and Niagara Mohawk
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cheesecake and Niagara is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and Niagara Mohawk Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niagara Mohawk Power 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 Niagara Mohawk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niagara Mohawk Power has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and Niagara Mohawk go up and down completely randomly.
Pair Corralation between Cheesecake Factory and Niagara Mohawk
Given the investment horizon of 90 days The Cheesecake Factory is expected to generate 1.03 times more return on investment than Niagara Mohawk. However, Cheesecake Factory is 1.03 times more volatile than Niagara Mohawk Power. It trades about -0.01 of its potential returns per unit of risk. Niagara Mohawk Power is currently generating about -0.2 per unit of risk. If you would invest 5,007 in The Cheesecake Factory on October 12, 2024 and sell it today you would lose (34.00) from holding The Cheesecake Factory or give up 0.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
The Cheesecake Factory vs. Niagara Mohawk Power
Performance |
| Timeline |
| The Cheesecake Factory |
| Niagara Mohawk Power |
Cheesecake Factory and Niagara Mohawk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheesecake Factory and Niagara Mohawk
The main advantage of trading using opposite Cheesecake Factory and Niagara Mohawk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheesecake Factory position performs unexpectedly, Niagara Mohawk 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 Niagara Mohawk will offset losses from the drop in Niagara Mohawk's long position.| Cheesecake Factory vs. Dine Brands Global | Cheesecake Factory vs. Bloomin Brands | Cheesecake Factory vs. BJs Restaurants | Cheesecake Factory vs. Brinker International |
| Niagara Mohawk vs. RLJ Lodging Trust | Niagara Mohawk vs. The Cheesecake Factory | Niagara Mohawk vs. Shake Shack | Niagara Mohawk vs. Bt Brands |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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