Correlation Between Cheesecake Factory and COSCIENS Biopharma

Can any of the company-specific risk be diversified away by investing in both Cheesecake Factory and COSCIENS Biopharma 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 COSCIENS Biopharma 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 COSCIENS Biopharma, you can compare the effects of market volatilities on Cheesecake Factory and COSCIENS Biopharma 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 COSCIENS Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheesecake Factory and COSCIENS Biopharma.

Diversification Opportunities for Cheesecake Factory and COSCIENS Biopharma

-0.78

Correlation Coefficient

Cheesecake Factory  COSCIENS Biopharma

Pay attention - limited upside

The 3 months correlation between Cheesecake and COSCIENS is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and COSCIENS Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCIENS Biopharma 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 COSCIENS Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSCIENS Biopharma has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and COSCIENS Biopharma go up and down completely randomly.

Pair Corralation between Cheesecake Factory and COSCIENS Biopharma

Given the investment horizon of 90 days Cheesecake Factory is expected to generate 7.79 times less return on investment than COSCIENS Biopharma. But when comparing it to its historical volatility, The Cheesecake Factory is 3.28 times less risky than COSCIENS Biopharma. It trades about 0.09 of its potential returns per unit of risk. COSCIENS Biopharma is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  266.00  in COSCIENS Biopharma on October 10, 2024 and sell it today you would earn a total of  77.00  from holding COSCIENS Biopharma or generate 28.95% return on investment over 90 days.

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

The Cheesecake Factory  vs.  COSCIENS Biopharma

The Cheesecake Factory

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Cheesecake Factory are ranked lower than 15 (%) 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.

COSCIENS Biopharma

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days COSCIENS Biopharma has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, COSCIENS Biopharma is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Cheesecake Factory and COSCIENS Biopharma

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

The idea behind The Cheesecake Factory and COSCIENS Biopharma 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.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.