Correlation Between Anheuser Busch and Cracker Barrel
Can any of the company-specific risk be diversified away by investing in both Anheuser Busch 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 Anheuser Busch and Cracker Barrel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anheuser Busch Inbev and Cracker Barrel Old, you can compare the effects of market volatilities on Anheuser Busch 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 Anheuser Busch with a short position of Cracker Barrel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and Cracker Barrel.
Diversification Opportunities for Anheuser Busch and Cracker Barrel
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Anheuser and Cracker is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev 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 Anheuser Busch 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 Anheuser Busch Inbev 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 Anheuser Busch i.e., Anheuser Busch and Cracker Barrel go up and down completely randomly.
Pair Corralation between Anheuser Busch and Cracker Barrel
Considering the 90-day investment horizon Anheuser Busch Inbev is expected to under-perform the Cracker Barrel. But the stock apears to be less risky and, when comparing its historical volatility, Anheuser Busch Inbev is 2.42 times less risky than Cracker Barrel. The stock trades about -0.08 of its potential returns per unit of risk. The Cracker Barrel Old is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,125 in Cracker Barrel Old on September 3, 2024 and sell it today you would earn a total of 539.00 from holding Cracker Barrel Old or generate 10.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anheuser Busch Inbev vs. Cracker Barrel Old
Performance |
| Timeline |
| Anheuser Busch Inbev |
| Cracker Barrel Old |
Anheuser Busch and Cracker Barrel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anheuser Busch and Cracker Barrel
The main advantage of trading using opposite Anheuser Busch and Cracker Barrel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anheuser Busch 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.| Anheuser Busch vs. Boston Beer | Anheuser Busch vs. Molson Coors Beverage | Anheuser Busch vs. Heineken NV | Anheuser Busch vs. Ambev SA ADR |
| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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