Correlation Between Cheesecake Factory and TFI International
Can any of the company-specific risk be diversified away by investing in both Cheesecake Factory and TFI International 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 TFI International 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 TFI International, you can compare the effects of market volatilities on Cheesecake Factory and TFI International 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 TFI International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheesecake Factory and TFI International.
Diversification Opportunities for Cheesecake Factory and TFI International
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cheesecake and TFI is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and TFI International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFI International 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 TFI International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TFI International has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and TFI International go up and down completely randomly.
Pair Corralation between Cheesecake Factory and TFI International
Given the investment horizon of 90 days The Cheesecake Factory is expected to generate 1.13 times more return on investment than TFI International. However, Cheesecake Factory is 1.13 times more volatile than TFI International. It trades about 0.26 of its potential returns per unit of risk. TFI International is currently generating about 0.16 per unit of risk. If you would invest 4,262 in The Cheesecake Factory on August 30, 2024 and sell it today you would earn a total of 712.00 from holding The Cheesecake Factory or generate 16.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Cheesecake Factory vs. TFI International
Performance |
| Timeline |
| The Cheesecake Factory |
| TFI International |
Cheesecake Factory and TFI International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheesecake Factory and TFI International
The main advantage of trading using opposite Cheesecake Factory and TFI International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheesecake Factory position performs unexpectedly, TFI International 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 TFI International will offset losses from the drop in TFI International's long position.| Cheesecake Factory vs. Dine Brands Global | Cheesecake Factory vs. Bloomin Brands | Cheesecake Factory vs. BJs Restaurants | Cheesecake Factory vs. Brinker International |
| TFI International vs. Old Dominion Freight | TFI International vs. ArcBest Corp | TFI International vs. Marten Transport | TFI International vs. Werner Enterprises |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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