Correlation Between Cheesecake Factory and Itronics

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

Diversification Opportunities for Cheesecake Factory and Itronics

0.0

Correlation Coefficient

Cheesecake Factory  Itronics

Pay attention - limited upside

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

Pair Corralation between Cheesecake Factory and Itronics

If you would invest  5,430  in The Cheesecake Factory on May 17, 2025 and sell it today you would earn a total of  907.00  from holding The Cheesecake Factory or generate 16.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

The Cheesecake Factory  vs.  Itronics

The Cheesecake Factory

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in The Cheesecake Factory are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward-looking signals, Cheesecake Factory exhibited solid returns over the last few months and may actually be approaching a breakup point.

Itronics

Risk-Adjusted Performance

Weakest

Over the last 90 days Itronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Itronics is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Cheesecake Factory and Itronics

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

The idea behind The Cheesecake Factory and Itronics 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.