Correlation Between Cracker Barrel and Cheesecake Factory
Can any of the company-specific risk be diversified away by investing in both Cracker Barrel 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 Cracker Barrel and Cheesecake Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cracker Barrel Old and The Cheesecake Factory, you can compare the effects of market volatilities on Cracker Barrel 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 Cracker Barrel with a short position of Cheesecake Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cracker Barrel and Cheesecake Factory.
Diversification Opportunities for Cracker Barrel and Cheesecake Factory
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cracker and Cheesecake is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Cracker Barrel Old 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 Cracker Barrel 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 Cracker Barrel Old 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 Cracker Barrel i.e., Cracker Barrel and Cheesecake Factory go up and down completely randomly.
Pair Corralation between Cracker Barrel and Cheesecake Factory
Given the investment horizon of 90 days Cracker Barrel Old is expected to under-perform the Cheesecake Factory. In addition to that, Cracker Barrel is 1.74 times more volatile than The Cheesecake Factory. It trades about -0.21 of its total potential returns per unit of risk. The Cheesecake Factory is currently generating about -0.1 per unit of volatility. If you would invest 6,164 in The Cheesecake Factory on July 17, 2025 and sell it today you would lose (714.00) from holding The Cheesecake Factory or give up 11.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cracker Barrel Old vs. The Cheesecake Factory
Performance |
| Timeline |
| Cracker Barrel Old |
| The Cheesecake Factory |
Cracker Barrel and Cheesecake Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cracker Barrel and Cheesecake Factory
The main advantage of trading using opposite Cracker Barrel and Cheesecake Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cracker Barrel 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.| Cracker Barrel vs. The Cheesecake Factory | Cracker Barrel vs. Darden Restaurants | Cracker Barrel vs. Brinker International | Cracker Barrel vs. Texas Roadhouse |
| Cheesecake Factory vs. Brinker International | Cheesecake Factory vs. BJs Restaurants | Cheesecake Factory vs. Texas Roadhouse | Cheesecake Factory vs. Papa Johns International |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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