Correlation Between Cheesecake Factory and Integral

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

Diversification Opportunities for Cheesecake Factory and Integral

-0.24

Correlation Coefficient

Cheesecake Factory  Integral

Very good diversification

The 3 months correlation between Cheesecake and Integral is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and Integral Ad Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integral Ad Science 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 Integral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integral Ad Science has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and Integral go up and down completely randomly.

Pair Corralation between Cheesecake Factory and Integral

Given the investment horizon of 90 days The Cheesecake Factory is expected to generate 0.61 times more return on investment than Integral. However, The Cheesecake Factory is 1.64 times less risky than Integral. It trades about 0.04 of its potential returns per unit of risk. Integral Ad Science is currently generating about 0.01 per unit of risk. If you would invest  3,705  in The Cheesecake Factory on October 27, 2024 and sell it today you would earn a total of  1,442  from holding The Cheesecake Factory or generate 38.92% return on investment over 90 days.

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

The Cheesecake Factory  vs.  Integral Ad Science

The Cheesecake Factory

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Cheesecake Factory are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile forward-looking signals, Cheesecake Factory exhibited solid returns over the last few months and may actually be approaching a breakup point.

Integral Ad Science

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integral Ad Science has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Cheesecake Factory and Integral

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

The idea behind The Cheesecake Factory and Integral Ad Science 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .