Correlation Between Cheesecake Factory and Nextnav Acquisition
Can any of the company-specific risk be diversified away by investing in both Cheesecake Factory and Nextnav Acquisition 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 Nextnav Acquisition 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 Nextnav Acquisition Corp, you can compare the effects of market volatilities on Cheesecake Factory and Nextnav Acquisition 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 Nextnav Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheesecake Factory and Nextnav Acquisition.
Diversification Opportunities for Cheesecake Factory and Nextnav Acquisition
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cheesecake and Nextnav is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and Nextnav Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextnav Acquisition Corp 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 Nextnav Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextnav Acquisition Corp has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and Nextnav Acquisition go up and down completely randomly.
Pair Corralation between Cheesecake Factory and Nextnav Acquisition
Given the investment horizon of 90 days Cheesecake Factory is expected to generate 4.02 times less return on investment than Nextnav Acquisition. But when comparing it to its historical volatility, The Cheesecake Factory is 2.25 times less risky than Nextnav Acquisition. It trades about 0.05 of its potential returns per unit of risk. Nextnav Acquisition Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 286.00 in Nextnav Acquisition Corp on September 5, 2024 and sell it today you would earn a total of 1,348 from holding Nextnav Acquisition Corp or generate 471.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Cheesecake Factory vs. Nextnav Acquisition Corp
Performance |
| Timeline |
| The Cheesecake Factory |
| Nextnav Acquisition Corp |
Cheesecake Factory and Nextnav Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheesecake Factory and Nextnav Acquisition
The main advantage of trading using opposite Cheesecake Factory and Nextnav Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheesecake Factory position performs unexpectedly, Nextnav Acquisition 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 Nextnav Acquisition will offset losses from the drop in Nextnav Acquisition's long position.| Cheesecake Factory vs. Hyatt Hotels | Cheesecake Factory vs. Smart Share Global | Cheesecake Factory vs. Wyndham Hotels Resorts | Cheesecake Factory vs. WW International |
| Nextnav Acquisition vs. NetScout Systems | Nextnav Acquisition vs. Priority Technology Holdings | Nextnav Acquisition vs. OneSpan | Nextnav Acquisition vs. Consensus Cloud Solutions |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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