Correlation Between Cheesecake Factory and Bragg Gaming

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

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

Diversification Opportunities for Cheesecake Factory and Bragg Gaming

0.77

Correlation Coefficient

Cheesecake Factory  Bragg Gaming

Poor diversification

The 3 months correlation between Cheesecake and Bragg is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and Bragg Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bragg Gaming Group and Cheesecake Factory 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 The Cheesecake Factory are associated (or correlated) with Bragg Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bragg Gaming Group has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and Bragg Gaming go up and down completely randomly.

Pair Corralation between Cheesecake Factory and Bragg Gaming

Given the investment horizon of 90 days Cheesecake Factory is expected to generate 16.57 times less return on investment than Bragg Gaming. But when comparing it to its historical volatility, The Cheesecake Factory is 1.98 times less risky than Bragg Gaming. It trades about 0.01 of its potential returns per unit of risk. Bragg Gaming Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  346.00  in Bragg Gaming Group on December 20, 2024 and sell it today you would earn a total of  101.00  from holding Bragg Gaming Group or generate 29.19% return on investment over 90 days.

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

The Cheesecake Factory  vs.  Bragg Gaming Group

The Cheesecake Factory

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Cheesecake Factory are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward-looking signals, Cheesecake Factory is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Bragg Gaming Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bragg Gaming Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Bragg Gaming reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cheesecake Factory and Bragg Gaming

The main advantage of trading using opposite Cheesecake Factory and Bragg Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheesecake Factory position performs unexpectedly, Bragg Gaming 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 Bragg Gaming will offset losses from the drop in Bragg Gaming's long position.

The idea behind The Cheesecake Factory and Bragg Gaming Group 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.