Correlation Between Cheesecake Factory and Minority Equality

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

Diversification Opportunities for Cheesecake Factory and Minority Equality

0.0

Correlation Coefficient

Cheesecake Factory  Minority Equality

Pay attention - limited upside

The 3 months correlation between Cheesecake and Minority is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and Minority Equality Opportunitie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minority Equality 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 Minority Equality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minority Equality has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and Minority Equality go up and down completely randomly.

Pair Corralation between Cheesecake Factory and Minority Equality

If you would invest  4,721  in The Cheesecake Factory on December 23, 2024 and sell it today you would earn a total of  149.00  from holding The Cheesecake Factory or generate 3.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

The Cheesecake Factory  vs.  Minority Equality Opportunitie

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 2 (%) 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.

Minority Equality

Risk-Adjusted Performance

Very Weak

Over the last 90 days Minority Equality Opportunities has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Minority Equality is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cheesecake Factory and Minority Equality

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

The idea behind The Cheesecake Factory and Minority Equality Opportunities 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.