Correlation Between Everi Holdings and Cheesecake Factory
Can any of the company-specific risk be diversified away by investing in both Everi Holdings 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 Everi Holdings and Cheesecake Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Everi Holdings and The Cheesecake Factory, you can compare the effects of market volatilities on Everi Holdings 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 Everi Holdings with a short position of Cheesecake Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everi Holdings and Cheesecake Factory.
Diversification Opportunities for Everi Holdings and Cheesecake Factory
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Everi and Cheesecake is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Everi Holdings 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 Everi Holdings 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 Everi Holdings 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 Everi Holdings i.e., Everi Holdings and Cheesecake Factory go up and down completely randomly.
Pair Corralation between Everi Holdings and Cheesecake Factory
Given the investment horizon of 90 days Everi Holdings is expected to generate 17.89 times less return on investment than Cheesecake Factory. But when comparing it to its historical volatility, Everi Holdings is 15.64 times less risky than Cheesecake Factory. It trades about 0.19 of its potential returns per unit of risk. The Cheesecake Factory is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 4,301 in The Cheesecake Factory on August 28, 2024 and sell it today you would earn a total of 576.00 from holding The Cheesecake Factory or generate 13.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Everi Holdings vs. The Cheesecake Factory
Performance |
| Timeline |
| Everi Holdings |
| The Cheesecake Factory |
Everi Holdings and Cheesecake Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Everi Holdings and Cheesecake Factory
The main advantage of trading using opposite Everi Holdings and Cheesecake Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everi Holdings 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.| Everi Holdings vs. Accel Entertainment | Everi Holdings vs. Light Wonder | Everi Holdings vs. Inspired Entertainment | Everi Holdings vs. International Game Technology |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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