Correlation Between Cheesecake Factory and Molson Coors
Can any of the company-specific risk be diversified away by investing in both Cheesecake Factory and Molson Coors 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 Molson Coors 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 Molson Coors Brewing, you can compare the effects of market volatilities on Cheesecake Factory and Molson Coors 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 Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheesecake Factory and Molson Coors.
Diversification Opportunities for Cheesecake Factory and Molson Coors
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cheesecake and Molson is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and Molson Coors Brewing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molson Coors Brewing 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 Molson Coors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molson Coors Brewing has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and Molson Coors go up and down completely randomly.
Pair Corralation between Cheesecake Factory and Molson Coors
Given the investment horizon of 90 days The Cheesecake Factory is expected to generate 1.49 times more return on investment than Molson Coors. However, Cheesecake Factory is 1.49 times more volatile than Molson Coors Brewing. It trades about 0.07 of its potential returns per unit of risk. Molson Coors Brewing is currently generating about 0.0 per unit of risk. If you would invest 3,211 in The Cheesecake Factory on August 31, 2024 and sell it today you would earn a total of 1,853 from holding The Cheesecake Factory or generate 57.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Cheesecake Factory vs. Molson Coors Brewing
Performance |
| Timeline |
| The Cheesecake Factory |
| Molson Coors Brewing |
Cheesecake Factory and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheesecake Factory and Molson Coors
The main advantage of trading using opposite Cheesecake Factory and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheesecake Factory position performs unexpectedly, Molson Coors 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 Molson Coors will offset losses from the drop in Molson Coors' long position.| Cheesecake Factory vs. RLJ Lodging Trust | Cheesecake Factory vs. Aquagold International | Cheesecake Factory vs. Stepstone Group | Cheesecake Factory vs. Morningstar Unconstrained Allocation |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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