Correlation Between Cheesecake Factory and Otsuka
Can any of the company-specific risk be diversified away by investing in both Cheesecake Factory and Otsuka 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 Otsuka 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 Otsuka, you can compare the effects of market volatilities on Cheesecake Factory and Otsuka 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 Otsuka. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheesecake Factory and Otsuka.
Diversification Opportunities for Cheesecake Factory and Otsuka
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cheesecake and Otsuka is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and Otsuka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otsuka 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 Otsuka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otsuka has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and Otsuka go up and down completely randomly.
Pair Corralation between Cheesecake Factory and Otsuka
If you would invest 4,529 in The Cheesecake Factory on September 5, 2024 and sell it today you would earn a total of 588.00 from holding The Cheesecake Factory or generate 12.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.55% |
| Values | Daily Returns |
The Cheesecake Factory vs. Otsuka
Performance |
| Timeline |
| The Cheesecake Factory |
| Otsuka |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cheesecake Factory and Otsuka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheesecake Factory and Otsuka
The main advantage of trading using opposite Cheesecake Factory and Otsuka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheesecake Factory position performs unexpectedly, Otsuka 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 Otsuka will offset losses from the drop in Otsuka'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 |
| Otsuka vs. The Cheesecake Factory | Otsuka vs. BJs Restaurants | Otsuka vs. PennantPark Investment | Otsuka vs. Cannae Holdings |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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