Correlation Between ASE Industrial and Cracker Barrel
Can any of the company-specific risk be diversified away by investing in both ASE Industrial 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 ASE Industrial and Cracker Barrel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASE Industrial Holding and Cracker Barrel Old, you can compare the effects of market volatilities on ASE Industrial 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 ASE Industrial with a short position of Cracker Barrel. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Cracker Barrel.
Diversification Opportunities for ASE Industrial and Cracker Barrel
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ASE and Cracker is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding 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 ASE Industrial 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 ASE Industrial Holding 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 ASE Industrial i.e., ASE Industrial and Cracker Barrel go up and down completely randomly.
Pair Corralation between ASE Industrial and Cracker Barrel
Considering the 90-day investment horizon ASE Industrial is expected to generate 6.05 times less return on investment than Cracker Barrel. But when comparing it to its historical volatility, ASE Industrial Holding is 1.85 times less risky than Cracker Barrel. It trades about 0.08 of its potential returns per unit of risk. Cracker Barrel Old is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 4,585 in Cracker Barrel Old on September 5, 2024 and sell it today you would earn a total of 986.00 from holding Cracker Barrel Old or generate 21.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASE Industrial Holding vs. Cracker Barrel Old
Performance |
| Timeline |
| ASE Industrial Holding |
| Cracker Barrel Old |
ASE Industrial and Cracker Barrel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and Cracker Barrel
The main advantage of trading using opposite ASE Industrial and Cracker Barrel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial 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.| ASE Industrial vs. NXP Semiconductors NV | ASE Industrial vs. Monolithic Power Systems | ASE Industrial vs. ON Semiconductor | ASE Industrial vs. GSI Technology |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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