Correlation Between Cheesecake Factory and Agiliti

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

Diversification Opportunities for Cheesecake Factory and Agiliti

0.36

Correlation Coefficient

Cheesecake Factory  Agiliti

Weak diversification

The 3 months correlation between Cheesecake and Agiliti is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and Agiliti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agiliti 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 Agiliti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agiliti has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and Agiliti go up and down completely randomly.

Pair Corralation between Cheesecake Factory and Agiliti

Given the investment horizon of 90 days The Cheesecake Factory is expected to under-perform the Agiliti. In addition to that, Cheesecake Factory is 5.36 times more volatile than Agiliti. It trades about -0.21 of its total potential returns per unit of risk. Agiliti is currently generating about 0.03 per unit of volatility. If you would invest  1,008  in Agiliti on February 2, 2024 and sell it today you would earn a total of  2.00  from holding Agiliti or generate 0.2% 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.  Agiliti

The Cheesecake Factory

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Cheesecake Factory has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Agiliti

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Agiliti are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Agiliti demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cheesecake Factory and Agiliti

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

The idea behind The Cheesecake Factory and Agiliti 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.