Correlation Between Cheesecake Factory and SAG Holdings
Can any of the company-specific risk be diversified away by investing in both Cheesecake Factory and SAG Holdings 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 SAG Holdings 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 SAG Holdings Limited, you can compare the effects of market volatilities on Cheesecake Factory and SAG Holdings 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 SAG Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheesecake Factory and SAG Holdings.
Diversification Opportunities for Cheesecake Factory and SAG Holdings
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cheesecake and SAG is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and SAG Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAG Holdings Limited 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 SAG Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAG Holdings Limited has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and SAG Holdings go up and down completely randomly.
Pair Corralation between Cheesecake Factory and SAG Holdings
Given the investment horizon of 90 days The Cheesecake Factory is expected to generate 0.39 times more return on investment than SAG Holdings. However, The Cheesecake Factory is 2.56 times less risky than SAG Holdings. It trades about 0.22 of its potential returns per unit of risk. SAG Holdings Limited is currently generating about -0.36 per unit of risk. If you would invest 4,301 in The Cheesecake Factory on August 28, 2024 and sell it today you would earn a total of 576.00 from holding The Cheesecake Factory or generate 13.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Cheesecake Factory vs. SAG Holdings Limited
Performance |
| Timeline |
| The Cheesecake Factory |
| SAG Holdings Limited |
Cheesecake Factory and SAG Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheesecake Factory and SAG Holdings
The main advantage of trading using opposite Cheesecake Factory and SAG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheesecake Factory position performs unexpectedly, SAG Holdings 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 SAG Holdings will offset losses from the drop in SAG Holdings' long position.| Cheesecake Factory vs. Dine Brands Global | Cheesecake Factory vs. Bloomin Brands | Cheesecake Factory vs. BJs Restaurants | Cheesecake Factory vs. Brinker International |
| SAG Holdings vs. Ingram Micro Holding | SAG Holdings vs. Hewlett Packard Enterprise | SAG Holdings vs. Global Partners LP | SAG Holdings vs. WESCO International |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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