Correlation Between Cheesecake Factory and Yum Brands
Can any of the company-specific risk be diversified away by investing in both Cheesecake Factory and Yum Brands 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 Yum Brands 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 Yum Brands, you can compare the effects of market volatilities on Cheesecake Factory and Yum Brands 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 Yum Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheesecake Factory and Yum Brands.
Diversification Opportunities for Cheesecake Factory and Yum Brands
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cheesecake and Yum is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and Yum Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yum Brands 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 Yum Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yum Brands has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and Yum Brands go up and down completely randomly.
Pair Corralation between Cheesecake Factory and Yum Brands
Given the investment horizon of 90 days The Cheesecake Factory is expected to generate 2.05 times more return on investment than Yum Brands. However, Cheesecake Factory is 2.05 times more volatile than Yum Brands. It trades about 0.03 of its potential returns per unit of risk. Yum Brands is currently generating about 0.02 per unit of risk. If you would invest 3,705 in The Cheesecake Factory on August 27, 2024 and sell it today you would earn a total of 951.00 from holding The Cheesecake Factory or generate 25.67% 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. Yum Brands
Performance |
| Timeline |
| The Cheesecake Factory |
| Yum Brands |
Cheesecake Factory and Yum Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheesecake Factory and Yum Brands
The main advantage of trading using opposite Cheesecake Factory and Yum Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheesecake Factory position performs unexpectedly, Yum Brands 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 Yum Brands will offset losses from the drop in Yum Brands' long position.| Cheesecake Factory vs. Dine Brands Global | Cheesecake Factory vs. Bloomin Brands | Cheesecake Factory vs. BJs Restaurants | Cheesecake Factory vs. Brinker International |
| Yum Brands vs. Shake Shack | Yum Brands vs. Papa Johns International | Yum Brands vs. Dominos Pizza | Yum Brands vs. Jack In The |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |