Correlation Between Cheesecake Factory and SEALSQ Corp

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

Diversification Opportunities for Cheesecake Factory and SEALSQ Corp

0.3

Correlation Coefficient

Cheesecake Factory  SEALSQ Corp

Weak diversification

The 3 months correlation between Cheesecake and SEALSQ is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and SEALSQ Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEALSQ 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 SEALSQ Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEALSQ Corp has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and SEALSQ Corp go up and down completely randomly.

Pair Corralation between Cheesecake Factory and SEALSQ Corp

Given the investment horizon of 90 days Cheesecake Factory is expected to generate 222.17 times less return on investment than SEALSQ Corp. But when comparing it to its historical volatility, The Cheesecake Factory is 16.61 times less risky than SEALSQ Corp. It trades about 0.05 of its potential returns per unit of risk. SEALSQ Corp is currently generating about 0.61 of returns per unit of risk over similar time horizon. If you would invest  39.00  in SEALSQ Corp on October 8, 2024 and sell it today you would earn a total of  775.00  from holding SEALSQ Corp or generate 1987.18% return on investment over 90 days.

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

The Cheesecake Factory  vs.  SEALSQ Corp

The Cheesecake Factory

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Cheesecake Factory are ranked lower than 12 (%) 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.

SEALSQ Corp

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SEALSQ Corp are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, SEALSQ Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cheesecake Factory and SEALSQ Corp

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

The idea behind The Cheesecake Factory and SEALSQ 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.

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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.