Correlation Between Bloomin Brands and Cracker Barrel
Can any of the company-specific risk be diversified away by investing in both Bloomin Brands 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 Bloomin Brands and Cracker Barrel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bloomin Brands and Cracker Barrel Old, you can compare the effects of market volatilities on Bloomin Brands 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 Bloomin Brands with a short position of Cracker Barrel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloomin Brands and Cracker Barrel.
Diversification Opportunities for Bloomin Brands and Cracker Barrel
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bloomin and Cracker is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Bloomin Brands 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 Bloomin Brands 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 Bloomin Brands 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 Bloomin Brands i.e., Bloomin Brands and Cracker Barrel go up and down completely randomly.
Pair Corralation between Bloomin Brands and Cracker Barrel
Given the investment horizon of 90 days Bloomin Brands is expected to generate 0.58 times more return on investment than Cracker Barrel. However, Bloomin Brands is 1.72 times less risky than Cracker Barrel. It trades about -0.02 of its potential returns per unit of risk. Cracker Barrel Old is currently generating about -0.15 per unit of risk. If you would invest 1,129 in Bloomin Brands on November 18, 2024 and sell it today you would lose (19.00) from holding Bloomin Brands or give up 1.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bloomin Brands vs. Cracker Barrel Old
Performance |
| Timeline |
| Bloomin Brands |
| Cracker Barrel Old |
Bloomin Brands and Cracker Barrel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloomin Brands and Cracker Barrel
The main advantage of trading using opposite Bloomin Brands and Cracker Barrel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloomin Brands 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.| Bloomin Brands vs. Dine Brands Global | Bloomin Brands vs. BJs Restaurants | Bloomin Brands vs. The Cheesecake Factory | Bloomin Brands vs. Brinker International |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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