Correlation Between Cheesecake Factory and OFX Group

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

Diversification Opportunities for Cheesecake Factory and OFX Group

-0.2

Correlation Coefficient

Cheesecake Factory  OFX Group

Good diversification

The 3 months correlation between Cheesecake and OFX is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and OFX Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFX Group 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 OFX Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFX Group has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and OFX Group go up and down completely randomly.

Pair Corralation between Cheesecake Factory and OFX Group

If you would invest  435.00  in OFX Group Ltd on September 29, 2024 and sell it today you would earn a total of  0.00  from holding OFX Group Ltd or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

The Cheesecake Factory  vs.  OFX Group Ltd

The Cheesecake Factory

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Cheesecake Factory are ranked lower than 9 (%) 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.

OFX Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in OFX Group Ltd are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, OFX Group showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cheesecake Factory and OFX Group

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

The idea behind The Cheesecake Factory and OFX Group Ltd 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.