Correlation Between Cheesecake Factory and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both Cheesecake Factory and PennantPark Floating 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 PennantPark Floating 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 PennantPark Floating Rate, you can compare the effects of market volatilities on Cheesecake Factory and PennantPark Floating 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 PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheesecake Factory and PennantPark Floating.
Diversification Opportunities for Cheesecake Factory and PennantPark Floating
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cheesecake and PennantPark is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and PennantPark Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Floating Rate 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 PennantPark Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Floating Rate has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and PennantPark Floating go up and down completely randomly.
Pair Corralation between Cheesecake Factory and PennantPark Floating
Given the investment horizon of 90 days Cheesecake Factory is expected to generate 7.76 times less return on investment than PennantPark Floating. In addition to that, Cheesecake Factory is 2.48 times more volatile than PennantPark Floating Rate. It trades about 0.02 of its total potential returns per unit of risk. PennantPark Floating Rate is currently generating about 0.45 per unit of volatility. If you would invest 1,061 in PennantPark Floating Rate on October 20, 2024 and sell it today you would earn a total of 56.00 from holding PennantPark Floating Rate or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Cheesecake Factory vs. PennantPark Floating Rate
Performance |
| Timeline |
| The Cheesecake Factory |
| PennantPark Floating Rate |
Cheesecake Factory and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheesecake Factory and PennantPark Floating
The main advantage of trading using opposite Cheesecake Factory and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheesecake Factory position performs unexpectedly, PennantPark Floating 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 PennantPark Floating will offset losses from the drop in PennantPark Floating's long position.| Cheesecake Factory vs. Dine Brands Global | Cheesecake Factory vs. Bloomin Brands | Cheesecake Factory vs. BJs Restaurants | Cheesecake Factory vs. Brinker International |
| PennantPark Floating vs. Gladstone Investment | PennantPark Floating vs. Horizon Technology Finance | PennantPark Floating vs. Stellus Capital Investment | PennantPark Floating vs. Prospect Capital |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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