Correlation Between Dalata Hotel and Cheesecake Factory
Can any of the company-specific risk be diversified away by investing in both Dalata Hotel and Cheesecake Factory 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 Dalata Hotel and Cheesecake Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dalata Hotel Group and The Cheesecake Factory, you can compare the effects of market volatilities on Dalata Hotel and Cheesecake Factory 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 Dalata Hotel with a short position of Cheesecake Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalata Hotel and Cheesecake Factory.
Diversification Opportunities for Dalata Hotel and Cheesecake Factory
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dalata and Cheesecake is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dalata Hotel Group and The Cheesecake Factory in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Cheesecake Factory and Dalata Hotel 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 Dalata Hotel Group are associated (or correlated) with Cheesecake Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Cheesecake Factory has no effect on the direction of Dalata Hotel i.e., Dalata Hotel and Cheesecake Factory go up and down completely randomly.
Pair Corralation between Dalata Hotel and Cheesecake Factory
Assuming the 90 days horizon Dalata Hotel is expected to generate 1.17 times less return on investment than Cheesecake Factory. In addition to that, Dalata Hotel is 1.16 times more volatile than The Cheesecake Factory. It trades about 0.05 of its total potential returns per unit of risk. The Cheesecake Factory is currently generating about 0.07 per unit of volatility. 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 | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Dalata Hotel Group vs. The Cheesecake Factory
Performance |
| Timeline |
| Dalata Hotel Group |
| The Cheesecake Factory |
Dalata Hotel and Cheesecake Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dalata Hotel and Cheesecake Factory
The main advantage of trading using opposite Dalata Hotel and Cheesecake Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalata Hotel position performs unexpectedly, Cheesecake Factory 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 Cheesecake Factory will offset losses from the drop in Cheesecake Factory's long position.| Dalata Hotel vs. NH Foods Ltd | Dalata Hotel vs. Getty Realty | Dalata Hotel vs. Beyond Meat | Dalata Hotel vs. Marfrig Global Foods |
| Cheesecake Factory vs. RLJ Lodging Trust | Cheesecake Factory vs. Aquagold International | Cheesecake Factory vs. Stepstone Group | Cheesecake Factory vs. Morningstar Unconstrained Allocation |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |