Correlation Between Supercom and Cheesecake Factory
Can any of the company-specific risk be diversified away by investing in both Supercom 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 Supercom and Cheesecake Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supercom and The Cheesecake Factory, you can compare the effects of market volatilities on Supercom 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 Supercom with a short position of Cheesecake Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supercom and Cheesecake Factory.
Diversification Opportunities for Supercom and Cheesecake Factory
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Supercom and Cheesecake is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Supercom 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 Supercom 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 Supercom 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 Supercom i.e., Supercom and Cheesecake Factory go up and down completely randomly.
Pair Corralation between Supercom and Cheesecake Factory
Given the investment horizon of 90 days Supercom is expected to under-perform the Cheesecake Factory. In addition to that, Supercom is 4.19 times more volatile than The Cheesecake Factory. It trades about -0.21 of its total potential returns per unit of risk. The Cheesecake Factory is currently generating about 0.12 per unit of volatility. If you would invest 5,183 in The Cheesecake Factory on November 28, 2024 and sell it today you would earn a total of 258.00 from holding The Cheesecake Factory or generate 4.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supercom vs. The Cheesecake Factory
Performance |
| Timeline |
| Supercom |
| The Cheesecake Factory |
Supercom and Cheesecake Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supercom and Cheesecake Factory
The main advantage of trading using opposite Supercom and Cheesecake Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supercom 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.| Supercom vs. Zedcor Inc | Supercom vs. SSC Security Services | Supercom vs. Blue Line Protection | Supercom vs. Guardforce AI Co |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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