Correlation Between Fiesta Restaurant and Cheesecake Factory
Can any of the company-specific risk be diversified away by investing in both Fiesta Restaurant and Cheesecake Factory 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 Fiesta Restaurant and Cheesecake Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fiesta Restaurant Group and The Cheesecake Factory, you can compare the effects of market volatilities on Fiesta Restaurant and Cheesecake Factory 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 Fiesta Restaurant with a short position of Cheesecake Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiesta Restaurant and Cheesecake Factory.
Diversification Opportunities for Fiesta Restaurant and Cheesecake Factory
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fiesta and Cheesecake is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fiesta Restaurant Group and The Cheesecake Factory in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Cheesecake Factory and Fiesta Restaurant 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 Fiesta Restaurant Group are associated (or correlated) with Cheesecake Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Cheesecake Factory has no effect on the direction of Fiesta Restaurant i.e., Fiesta Restaurant and Cheesecake Factory go up and down completely randomly.
Pair Corralation between Fiesta Restaurant and Cheesecake Factory
If you would invest 4,955 in The Cheesecake Factory on December 2, 2024 and sell it today you would earn a total of 448.00 from holding The Cheesecake Factory or generate 9.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Fiesta Restaurant Group vs. The Cheesecake Factory
Performance |
Timeline |
Fiesta Restaurant |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
The Cheesecake Factory |
Fiesta Restaurant and Cheesecake Factory Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fiesta Restaurant and Cheesecake Factory
The main advantage of trading using opposite Fiesta Restaurant and Cheesecake Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiesta Restaurant position performs unexpectedly, Cheesecake Factory 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 Cheesecake Factory will offset losses from the drop in Cheesecake Factory's long position.Fiesta Restaurant vs. BJs Restaurants | Fiesta Restaurant vs. Dine Brands Global | Fiesta Restaurant vs. Brinker International | Fiesta Restaurant vs. FAT Brands |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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