Correlation Between Cheesecake Factory and Pekin Life
Can any of the company-specific risk be diversified away by investing in both Cheesecake Factory and Pekin Life 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 Pekin Life 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 Pekin Life Insurance, you can compare the effects of market volatilities on Cheesecake Factory and Pekin Life 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 Pekin Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheesecake Factory and Pekin Life.
Diversification Opportunities for Cheesecake Factory and Pekin Life
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cheesecake and Pekin is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and Pekin Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pekin Life Insurance 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 Pekin Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pekin Life Insurance has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and Pekin Life go up and down completely randomly.
Pair Corralation between Cheesecake Factory and Pekin Life
Given the investment horizon of 90 days The Cheesecake Factory is expected to generate 1.25 times more return on investment than Pekin Life. However, Cheesecake Factory is 1.25 times more volatile than Pekin Life Insurance. It trades about 0.05 of its potential returns per unit of risk. Pekin Life Insurance is currently generating about 0.01 per unit of risk. If you would invest 3,237 in The Cheesecake Factory on September 4, 2024 and sell it today you would earn a total of 1,718 from holding The Cheesecake Factory or generate 53.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
The Cheesecake Factory vs. Pekin Life Insurance
Performance |
| Timeline |
| The Cheesecake Factory |
| Pekin Life Insurance |
Cheesecake Factory and Pekin Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheesecake Factory and Pekin Life
The main advantage of trading using opposite Cheesecake Factory and Pekin Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheesecake Factory position performs unexpectedly, Pekin Life 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 Pekin Life will offset losses from the drop in Pekin Life's long position.| Cheesecake Factory vs. Hyatt Hotels | Cheesecake Factory vs. Smart Share Global | Cheesecake Factory vs. Sweetgreen | Cheesecake Factory vs. Wyndham Hotels Resorts |
| Pekin Life vs. FG Annuities Life | Pekin Life vs. MetLife Preferred Stock | Pekin Life vs. Brighthouse Financial | Pekin Life vs. MetLife Preferred Stock |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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