Correlation Between Black Spade and Cheesecake Factory

Can any of the company-specific risk be diversified away by investing in both Black Spade 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 Black Spade and Cheesecake Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Black Spade Acquisition and The Cheesecake Factory, you can compare the effects of market volatilities on Black Spade 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 Black Spade with a short position of Cheesecake Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Spade and Cheesecake Factory.

Diversification Opportunities for Black Spade and Cheesecake Factory

0.72

Correlation Coefficient

Black Spade  Cheesecake Factory

Poor diversification

The 3 months correlation between Black and Cheesecake is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Black Spade Acquisition 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 Black Spade 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 Black Spade Acquisition 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 Black Spade i.e., Black Spade and Cheesecake Factory go up and down completely randomly.

Pair Corralation between Black Spade and Cheesecake Factory

If you would invest  1,006  in Black Spade Acquisition on October 11, 2024 and sell it today you would earn a total of  0.00  from holding Black Spade Acquisition or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Black Spade Acquisition  vs.  The Cheesecake Factory

Black Spade Acquisition

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Black Spade Acquisition are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward indicators, Black Spade is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

The Cheesecake Factory

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Cheesecake Factory are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating forward-looking signals, Cheesecake Factory exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Black Spade and Cheesecake Factory

The main advantage of trading using opposite Black Spade and Cheesecake Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Spade 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.

The idea behind Black Spade Acquisition and The Cheesecake Factory pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.