Correlation Between HE Equipment and Cheesecake Factory
Can any of the company-specific risk be diversified away by investing in both HE Equipment 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 HE Equipment and Cheesecake Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HE Equipment Services and The Cheesecake Factory, you can compare the effects of market volatilities on HE Equipment 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 HE Equipment with a short position of Cheesecake Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of HE Equipment and Cheesecake Factory.
Diversification Opportunities for HE Equipment and Cheesecake Factory
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HEES and Cheesecake is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding HE Equipment Services 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 HE Equipment 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 HE Equipment Services 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 HE Equipment i.e., HE Equipment and Cheesecake Factory go up and down completely randomly.
Pair Corralation between HE Equipment and Cheesecake Factory
Given the investment horizon of 90 days HE Equipment Services is expected to generate 1.24 times more return on investment than Cheesecake Factory. However, HE Equipment is 1.24 times more volatile than The Cheesecake Factory. It trades about 0.04 of its potential returns per unit of risk. The Cheesecake Factory is currently generating about 0.05 per unit of risk. If you would invest 4,005 in HE Equipment Services on August 26, 2024 and sell it today you would earn a total of 1,871 from holding HE Equipment Services or generate 46.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HE Equipment Services vs. The Cheesecake Factory
Performance |
| Timeline |
| HE Equipment Services |
| The Cheesecake Factory |
HE Equipment and Cheesecake Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HE Equipment and Cheesecake Factory
The main advantage of trading using opposite HE Equipment and Cheesecake Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HE Equipment 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.| HE Equipment vs. PROG Holdings | HE Equipment vs. McGrath RentCorp | HE Equipment vs. Mega Matrix Corp | HE Equipment vs. FTAI Aviation Ltd |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Commodity Directory Find actively traded commodities issued by global exchanges |