Correlation Between Cheesecake Factory and HF Sinclair

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

Diversification Opportunities for Cheesecake Factory and HF Sinclair

-0.68

Correlation Coefficient

Cheesecake Factory  HF Sinclair

Excellent diversification

The 3 months correlation between Cheesecake and DINO is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and HF Sinclair Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HF Sinclair Corp 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 HF Sinclair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HF Sinclair Corp has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and HF Sinclair go up and down completely randomly.

Pair Corralation between Cheesecake Factory and HF Sinclair

Given the investment horizon of 90 days The Cheesecake Factory is expected to generate 1.2 times more return on investment than HF Sinclair. However, Cheesecake Factory is 1.2 times more volatile than HF Sinclair Corp. It trades about -0.11 of its potential returns per unit of risk. HF Sinclair Corp is currently generating about -0.39 per unit of risk. If you would invest  5,011  in The Cheesecake Factory on October 4, 2024 and sell it today you would lose (267.00) from holding The Cheesecake Factory or give up 5.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

The Cheesecake Factory  vs.  HF Sinclair Corp

The Cheesecake Factory

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Cheesecake Factory are ranked lower than 6 (%) 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.

HF Sinclair Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HF Sinclair Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Cheesecake Factory and HF Sinclair

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

The idea behind The Cheesecake Factory and HF Sinclair Corp 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.