Correlation Between Brinker International and Cheesecake Factory
Can any of the company-specific risk be diversified away by investing in both Brinker International 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 Brinker International and Cheesecake Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brinker International and The Cheesecake Factory, you can compare the effects of market volatilities on Brinker International 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 Brinker International with a short position of Cheesecake Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker International and Cheesecake Factory.
Diversification Opportunities for Brinker International and Cheesecake Factory
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Brinker and Cheesecake is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Brinker International 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 Brinker International 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 Brinker International 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 Brinker International i.e., Brinker International and Cheesecake Factory go up and down completely randomly.
Pair Corralation between Brinker International and Cheesecake Factory
Considering the 90-day investment horizon Brinker International is expected to generate 1.18 times more return on investment than Cheesecake Factory. However, Brinker International is 1.18 times more volatile than The Cheesecake Factory. It trades about 0.11 of its potential returns per unit of risk. The Cheesecake Factory is currently generating about 0.03 per unit of risk. If you would invest 4,035 in Brinker International on August 27, 2024 and sell it today you would earn a total of 8,527 from holding Brinker International or generate 211.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brinker International vs. The Cheesecake Factory
Performance |
| Timeline |
| Brinker International |
| The Cheesecake Factory |
Brinker International and Cheesecake Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brinker International and Cheesecake Factory
The main advantage of trading using opposite Brinker International and Cheesecake Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinker International 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.| Brinker International vs. Dennys Corp | Brinker International vs. Bloomin Brands | Brinker International vs. Jack In The | Brinker International vs. Dine Brands Global |
| Cheesecake Factory vs. Dine Brands Global | Cheesecake Factory vs. Bloomin Brands | Cheesecake Factory vs. BJs Restaurants | Cheesecake Factory vs. Brinker International |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |