Correlation Between Cheesecake Factory and Nabors Energy

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

Diversification Opportunities for Cheesecake Factory and Nabors Energy

0.6

Correlation Coefficient

Cheesecake Factory  Nabors Energy

Poor diversification

The 3 months correlation between Cheesecake and Nabors is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding The Cheesecake Factory and Nabors Energy Transition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nabors Energy Transition 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 Nabors Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nabors Energy Transition has no effect on the direction of Cheesecake Factory i.e., Cheesecake Factory and Nabors Energy go up and down completely randomly.

Pair Corralation between Cheesecake Factory and Nabors Energy

Given the investment horizon of 90 days The Cheesecake Factory is expected to generate 5.43 times more return on investment than Nabors Energy. However, Cheesecake Factory is 5.43 times more volatile than Nabors Energy Transition. It trades about 0.11 of its potential returns per unit of risk. Nabors Energy Transition is currently generating about 0.07 per unit of risk. If you would invest  5,518  in The Cheesecake Factory on May 27, 2025 and sell it today you would earn a total of  753.00  from holding The Cheesecake Factory or generate 13.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	93.75%
Values	Daily Returns

The Cheesecake Factory  vs.  Nabors Energy Transition

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 8 (%) 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.

Nabors Energy Transition

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Nabors Energy Transition are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Nabors Energy is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Cheesecake Factory and Nabors Energy

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

The idea behind The Cheesecake Factory and Nabors Energy Transition 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..