Correlation Between Rave Restaurant and Cheesecake Factory
Can any of the company-specific risk be diversified away by investing in both Rave 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 Rave 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 Rave Restaurant Group and The Cheesecake Factory, you can compare the effects of market volatilities on Rave 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 Rave Restaurant with a short position of Cheesecake Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rave Restaurant and Cheesecake Factory.
Diversification Opportunities for Rave Restaurant and Cheesecake Factory
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rave and Cheesecake is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Rave 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 Rave 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 Rave 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 Rave Restaurant i.e., Rave Restaurant and Cheesecake Factory go up and down completely randomly.
Pair Corralation between Rave Restaurant and Cheesecake Factory
Given the investment horizon of 90 days Rave Restaurant Group is expected to generate 0.93 times more return on investment than Cheesecake Factory. However, Rave Restaurant Group is 1.07 times less risky than Cheesecake Factory. It trades about -0.04 of its potential returns per unit of risk. The Cheesecake Factory is currently generating about -0.14 per unit of risk. If you would invest 209.00 in Rave Restaurant Group on February 1, 2024 and sell it today you would lose (4.00) from holding Rave Restaurant Group or give up 1.91% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Rave Restaurant Group vs. The Cheesecake Factory
Performance |
Timeline |
Rave Restaurant Group |
The Cheesecake Factory |
Rave Restaurant and Cheesecake Factory Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Rave Restaurant and Cheesecake Factory
The main advantage of trading using opposite Rave Restaurant and Cheesecake Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rave 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.Rave Restaurant vs. Ark Restaurants Corp | Rave Restaurant vs. One Group Hospitality | Rave Restaurant vs. Flanigans Enterprises | Rave Restaurant vs. Noble Romans |
Cheesecake Factory vs. Dine Brands Global | Cheesecake Factory vs. Bloomin Brands | Cheesecake Factory vs. BJs Restaurants | Cheesecake Factory vs. Chuys Holdings |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Transaction History View history of all your transactions and understand their impact on performance | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |