Correlation Between NYSE Composite and Cheesecake Factory
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Cheesecake Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and The Cheesecake Factory, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Cheesecake Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Cheesecake Factory.
Diversification Opportunities for NYSE Composite and Cheesecake Factory
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Cheesecake is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Cheesecake Factory go up and down completely randomly.
Pair Corralation between NYSE Composite and Cheesecake Factory
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.92 times less return on investment than Cheesecake Factory. But when comparing it to its historical volatility, NYSE Composite is 4.31 times less risky than Cheesecake Factory. It trades about 0.24 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. The Cheesecake Factory
Performance |
| Timeline |
NYSE Composite and Cheesecake Factory Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
The Cheesecake Factory
Pair trading matchups for Cheesecake Factory
Pair Trading with NYSE Composite and Cheesecake Factory
The main advantage of trading using opposite NYSE Composite and Cheesecake Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |