Correlation Between Arrow Electronics and Cracker Barrel
Can any of the company-specific risk be diversified away by investing in both Arrow Electronics 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 Arrow Electronics and Cracker Barrel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Electronics and Cracker Barrel Old, you can compare the effects of market volatilities on Arrow Electronics 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 Arrow Electronics with a short position of Cracker Barrel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Electronics and Cracker Barrel.
Diversification Opportunities for Arrow Electronics and Cracker Barrel
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Arrow and Cracker is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Electronics 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 Arrow Electronics 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 Arrow Electronics 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 Arrow Electronics i.e., Arrow Electronics and Cracker Barrel go up and down completely randomly.
Pair Corralation between Arrow Electronics and Cracker Barrel
Considering the 90-day investment horizon Arrow Electronics is expected to under-perform the Cracker Barrel. But the stock apears to be less risky and, when comparing its historical volatility, Arrow Electronics is 1.15 times less risky than Cracker Barrel. The stock trades about -0.16 of its potential returns per unit of risk. The Cracker Barrel Old is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 4,951 in Cracker Barrel Old on August 31, 2024 and sell it today you would earn a total of 605.00 from holding Cracker Barrel Old or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Electronics vs. Cracker Barrel Old
Performance |
| Timeline |
| Arrow Electronics |
| Cracker Barrel Old |
Arrow Electronics and Cracker Barrel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Electronics and Cracker Barrel
The main advantage of trading using opposite Arrow Electronics and Cracker Barrel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Electronics 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.| Arrow Electronics vs. Insight Enterprises | Arrow Electronics vs. Synnex | Arrow Electronics vs. Climb Global Solutions | Arrow Electronics vs. ScanSource |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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