Correlation Between Cheesecake Factory and NetMed
Can any of the company-specific risk be diversified away by investing in both Cheesecake Factory and NetMed 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 NetMed 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 NetMed Inc, you can compare the effects of market volatilities on Cheesecake Factory and NetMed 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 NetMed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheesecake Factory and NetMed.
Diversification Opportunities for Cheesecake Factory and NetMed
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cheesecake and NetMed is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and NetMed Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetMed Inc 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 NetMed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetMed Inc has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and NetMed go up and down completely randomly.
Pair Corralation between Cheesecake Factory and NetMed
If you would invest 4,853 in The Cheesecake Factory on October 20, 2024 and sell it today you would earn a total of 23.00 from holding The Cheesecake Factory or generate 0.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
The Cheesecake Factory vs. NetMed Inc
Performance |
| Timeline |
| The Cheesecake Factory |
| NetMed Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cheesecake Factory and NetMed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheesecake Factory and NetMed
The main advantage of trading using opposite Cheesecake Factory and NetMed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheesecake Factory position performs unexpectedly, NetMed 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 NetMed will offset losses from the drop in NetMed's long position.| Cheesecake Factory vs. Dine Brands Global | Cheesecake Factory vs. Bloomin Brands | Cheesecake Factory vs. BJs Restaurants | Cheesecake Factory vs. Brinker International |
| NetMed vs. Major Drilling Group | NetMed vs. Office Properties Income | NetMed vs. Helmerich and Payne | NetMed vs. Borr Drilling |
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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