Correlation Between Ark Restaurants and Cracker Barrel
Can any of the company-specific risk be diversified away by investing in both Ark Restaurants and Cracker Barrel 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 Ark Restaurants and Cracker Barrel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ark Restaurants Corp and Cracker Barrel Old, you can compare the effects of market volatilities on Ark Restaurants and Cracker Barrel 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 Ark Restaurants with a short position of Cracker Barrel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ark Restaurants and Cracker Barrel.
Diversification Opportunities for Ark Restaurants and Cracker Barrel
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ark and Cracker is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ark Restaurants Corp and Cracker Barrel Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cracker Barrel Old and Ark Restaurants 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 Ark Restaurants Corp are associated (or correlated) with Cracker Barrel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cracker Barrel Old has no effect on the direction of Ark Restaurants i.e., Ark Restaurants and Cracker Barrel go up and down completely randomly.
Pair Corralation between Ark Restaurants and Cracker Barrel
Given the investment horizon of 90 days Ark Restaurants Corp is expected to under-perform the Cracker Barrel. But the stock apears to be less risky and, when comparing its historical volatility, Ark Restaurants Corp is 1.95 times less risky than Cracker Barrel. The stock trades about -0.3 of its potential returns per unit of risk. The Cracker Barrel Old is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 4,995 in Cracker Barrel Old on August 27, 2024 and sell it today you would lose (154.00) from holding Cracker Barrel Old or give up 3.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ark Restaurants Corp vs. Cracker Barrel Old
Performance |
| Timeline |
| Ark Restaurants Corp |
| Cracker Barrel Old |
Ark Restaurants and Cracker Barrel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ark Restaurants and Cracker Barrel
The main advantage of trading using opposite Ark Restaurants and Cracker Barrel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ark Restaurants position performs unexpectedly, Cracker Barrel 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 Cracker Barrel will offset losses from the drop in Cracker Barrel's long position.| Ark Restaurants vs. Nathans Famous | Ark Restaurants vs. Flanigans Enterprises | Ark Restaurants vs. Good Times Restaurants | Ark Restaurants vs. Auburn National Bancorporation |
| Cracker Barrel vs. Brinker International | Cracker Barrel vs. BJs Restaurants | Cracker Barrel vs. Texas Roadhouse | Cracker Barrel 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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