Correlation Between Cheesecake Factory and Willscot Mobile
Can any of the company-specific risk be diversified away by investing in both Cheesecake Factory and Willscot Mobile 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 Willscot Mobile 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 Willscot Mobile Mini, you can compare the effects of market volatilities on Cheesecake Factory and Willscot Mobile 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 Willscot Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheesecake Factory and Willscot Mobile.
Diversification Opportunities for Cheesecake Factory and Willscot Mobile
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cheesecake and Willscot is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and Willscot Mobile Mini in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willscot Mobile Mini 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 Willscot Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willscot Mobile Mini has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and Willscot Mobile go up and down completely randomly.
Pair Corralation between Cheesecake Factory and Willscot Mobile
Given the investment horizon of 90 days The Cheesecake Factory is expected to generate 0.98 times more return on investment than Willscot Mobile. However, The Cheesecake Factory is 1.02 times less risky than Willscot Mobile. It trades about 0.05 of its potential returns per unit of risk. Willscot Mobile Mini is currently generating about -0.01 per unit of risk. If you would invest 3,016 in The Cheesecake Factory on August 26, 2024 and sell it today you would earn a total of 1,640 from holding The Cheesecake Factory or generate 54.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Cheesecake Factory vs. Willscot Mobile Mini
Performance |
| Timeline |
| The Cheesecake Factory |
| Willscot Mobile Mini |
Cheesecake Factory and Willscot Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheesecake Factory and Willscot Mobile
The main advantage of trading using opposite Cheesecake Factory and Willscot Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheesecake Factory position performs unexpectedly, Willscot Mobile 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 Willscot Mobile will offset losses from the drop in Willscot Mobile's long position.| Cheesecake Factory vs. Dine Brands Global | Cheesecake Factory vs. Bloomin Brands | Cheesecake Factory vs. BJs Restaurants | Cheesecake Factory vs. Brinker International |
| Willscot Mobile vs. HE Equipment Services | Willscot Mobile vs. GATX Corporation | Willscot Mobile vs. McGrath RentCorp | Willscot Mobile vs. Alta Equipment Group |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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