Correlation Between U Haul and Cheesecake Factory
Can any of the company-specific risk be diversified away by investing in both U Haul 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 U Haul and Cheesecake Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between U Haul Holding and The Cheesecake Factory, you can compare the effects of market volatilities on U Haul 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 U Haul with a short position of Cheesecake Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Haul and Cheesecake Factory.
Diversification Opportunities for U Haul and Cheesecake Factory
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between UHAL and Cheesecake is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding U Haul Holding 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 U Haul 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 U Haul Holding 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 U Haul i.e., U Haul and Cheesecake Factory go up and down completely randomly.
Pair Corralation between U Haul and Cheesecake Factory
Given the investment horizon of 90 days U Haul is expected to generate 1.24 times less return on investment than Cheesecake Factory. But when comparing it to its historical volatility, U Haul Holding is 1.27 times less risky than Cheesecake Factory. It trades about 0.09 of its potential returns per unit of risk. The Cheesecake Factory is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,996 in The Cheesecake Factory on August 26, 2024 and sell it today you would earn a total of 1,660 from holding The Cheesecake Factory or generate 55.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Haul Holding vs. The Cheesecake Factory
Performance |
| Timeline |
| U Haul Holding |
| The Cheesecake Factory |
U Haul and Cheesecake Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Haul and Cheesecake Factory
The main advantage of trading using opposite U Haul and Cheesecake Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Haul 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.| U Haul vs. AerCap Holdings NV | U Haul vs. Alta Equipment Group | U Haul vs. PROG Holdings | U Haul vs. GATX Corporation |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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