Correlation Between Cheesecake Factory and Sonder Holdings
Can any of the company-specific risk be diversified away by investing in both Cheesecake Factory and Sonder 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 Sonder 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 Sonder Holdings, you can compare the effects of market volatilities on Cheesecake Factory and Sonder 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 Sonder Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheesecake Factory and Sonder Holdings.
Diversification Opportunities for Cheesecake Factory and Sonder Holdings
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cheesecake and Sonder is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and Sonder Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonder Holdings 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 Sonder Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonder Holdings has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and Sonder Holdings go up and down completely randomly.
Pair Corralation between Cheesecake Factory and Sonder Holdings
Given the investment horizon of 90 days The Cheesecake Factory is expected to generate 0.2 times more return on investment than Sonder Holdings. However, The Cheesecake Factory is 5.0 times less risky than Sonder Holdings. It trades about 0.05 of its potential returns per unit of risk. Sonder Holdings is currently generating about 0.01 per unit of risk. If you would invest 3,189 in The Cheesecake Factory on September 3, 2024 and sell it today you would earn a total of 1,766 from holding The Cheesecake Factory or generate 55.38% 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. Sonder Holdings
Performance |
| Timeline |
| The Cheesecake Factory |
| Sonder Holdings |
Cheesecake Factory and Sonder Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheesecake Factory and Sonder Holdings
The main advantage of trading using opposite Cheesecake Factory and Sonder Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheesecake Factory position performs unexpectedly, Sonder 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 Sonder Holdings will offset losses from the drop in Sonder Holdings' long position.| Cheesecake Factory vs. Highway Holdings Limited | Cheesecake Factory vs. QCR Holdings | Cheesecake Factory vs. Partner Communications | Cheesecake Factory vs. Acumen Pharmaceuticals |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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