Correlation Between Mativ Holdings and Cheesecake Factory
Can any of the company-specific risk be diversified away by investing in both Mativ 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 Mativ 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 Mativ Holdings and The Cheesecake Factory, you can compare the effects of market volatilities on Mativ 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 Mativ Holdings with a short position of Cheesecake Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mativ Holdings and Cheesecake Factory.
Diversification Opportunities for Mativ Holdings and Cheesecake Factory
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mativ and Cheesecake is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Mativ 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 Mativ 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 Mativ 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 Mativ Holdings i.e., Mativ Holdings and Cheesecake Factory go up and down completely randomly.
Pair Corralation between Mativ Holdings and Cheesecake Factory
Given the investment horizon of 90 days Mativ Holdings is expected to under-perform the Cheesecake Factory. In addition to that, Mativ Holdings is 1.84 times more volatile than The Cheesecake Factory. It trades about -0.03 of its total potential returns per unit of risk. The Cheesecake Factory is currently generating about 0.1 per unit of volatility. If you would invest 3,902 in The Cheesecake Factory on September 3, 2024 and sell it today you would earn a total of 1,162 from holding The Cheesecake Factory or generate 29.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mativ Holdings vs. The Cheesecake Factory
Performance |
| Timeline |
| Mativ Holdings |
| The Cheesecake Factory |
Mativ Holdings and Cheesecake Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mativ Holdings and Cheesecake Factory
The main advantage of trading using opposite Mativ Holdings and Cheesecake Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mativ 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.| Mativ Holdings vs. Orion Engineered Carbons | Mativ Holdings vs. Select Energy Services | Mativ Holdings vs. Perimeter Solutions SA | Mativ Holdings vs. FutureFuel Corp |
| Cheesecake Factory vs. Highway Holdings Limited | Cheesecake Factory vs. QCR Holdings | Cheesecake Factory vs. Partner Communications | Cheesecake Factory vs. Acumen Pharmaceuticals |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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